Oral Answers to Questions

WORK AND PENSIONS

The Secretary of State was asked—

Unemployment (Cardiff)

Kevin Brennan: What measures he will take to assist the hardest-to-help unemployed into work in Cardiff, West.

Nick Brown: We have introduced a range of initiatives that are helping disadvantaged groups to move from welfare into work in all parts of the country. In Cardiff, West, long-term unemployment has fallen by over two thirds, and long-term youth unemployment by three quarters, since 1997.
	Part of the Cardiff, West constituency will also be one of the areas covered by our new pilot programme, StepUp, to be launched in April. StepUp will provide transitional jobs to act as a stepping stone for some of the hardest-to-help unemployed people moving from benefits into work.

Kevin Brennan: I thank my right hon. Friend for his answer and, in particular, for the pilot scheme that the Government will run in my constituency to help the unemployed.
	Does my right hon. Friend recognise that even in areas such as Cardiff, a vibrant, prosperous city with a tremendous economic record under the present Government, there are still hard-core, long-term unemployed people who are difficult to assist, and who really need that helping hand into the job market? Can he assure me that the jobs that will be available under the StepUp programme will be of good quality, so that people are encouraged to enter the labour market permanently once those jobs have ended?

Nick Brown: Yes, I can. A range of jobs will be available to each client, and will be guaranteed for up to a year. It will be real work, and people will be paid at least the minimum wage. They will be employed, as opposed to on a scheme, and the Department will work with individual clients to ensure that these opportunities lead to further, permanent employment.

Benefit Fraud

Bill Wiggin: If he will make a statement on the level of benefit fraud.

Patrick Mercer: What targets his Department has set local authorities for benefit fraud prosecutions for 2001–02.

Alistair Darling: We estimate that £2 billion is lost annually owing to confirmable fraud across all benefits.
	Latest results show that in the two and a half years to March 2001 we have reduced the level of fraud and error in income support and jobseeker's allowance by 18 per cent. We expect that good progress to continue.
	Today I shall lay before the House a code of practice which governs the use of new powers to obtain information from banks, insurance and utility companies about suspected fraud. Those measures, along with new powers to punish persistent offenders and tougher penalties for collusive employers, will begin to be implemented in April.

Bill Wiggin: Will the Secretary of State confirm that, according to his own figures, only 1,100 of the 460,000 cases of suspected fraud were successfully prosecuted? That is a success rate of some 99 per cent. [Interruption.] I mean a failure rate of 99 per cent. The exact figure is 99.75 per cent. Does the Secretary of State agree that that figure reflects his Department's lax attitude?

Alistair Darling: I was going to say that 99 per cent. sounded all right to me.
	As the hon. Gentleman has raised the issue, I will tell him that nearly 27,000 prosecutions, cautions and administrative penalties were applied last year. As I said in my initial answer, the level of fraud and error in the system remains unacceptably high, and we are introducing a number of measures to lower it. As a result of changes we have made to tighten up the system, there has been an 18 per cent. drop in fraud and error in income support and jobseeker's allowance, two of the main benefits. That is encouraging. We must now go on tightening up the system. Under the new Jobcentre Plus regime, we will see people more regularly so that we can check their circumstances, and the information technology replacement programme will mean a steady improvement, year on year, in an inheritance that I regard as thoroughly unacceptable.

Patrick Mercer: In 1999-2000, 50 per cent. of local authorities failed to prosecute a single person for council tax benefit fraud or housing benefit fraud. My local authorities in Newark and Retford tell me that, with changes in housing benefit administration occurring nearly every fortnight, the delivery of the benefit—let alone detection of fraud—is almost impossible. Would the Secretary of State care to comment?

Alistair Darling: Successive Governments have tried to tighten up the regime for administering housing benefit. One of the problems is that it is run by just over 400 local authorities. Interestingly, while some authorities can run it quite well and have a good record, others do not. In some cases, the record has been truly appalling. That is one reason why we sent action teams to improve the performance of a number of authorities, which has resulted in a significant improvement in the administration of housing benefit.
	It is up to local authorities whether to refer cases for prosecution; central Government do not control that. I am, however, determined that we should bear down on housing benefit fraud as vigorously as we are bearing down on fraud in JSA and income support. As I said a moment ago, there has already been an 18 per cent. reduction in fraud—something that was never achieved in the past.

Frank Roy: The Secretary of State will be aware that the only way to tackle benefit fraud is through the hard work of Jobcentre Plus staff, and that today many thousands of those staff are on strike because of fears for their safety at the workplace. Will he do whatever he can to bring both sides together to resolve that serious dispute before it escalates any further?

Alistair Darling: From the figures we have as of lunchtime, fewer people are on strike today than during the previous so-called national strike in December, and significantly fewer offices have closed. The problem that the PCS—the Public and Commercial Services union—has to face is that it does not have the support of anything like a majority of staff in its campaign to retain screens in benefit offices. Today, nearly three quarters of department staff are in work. Critically, the vast majority of staff working in the new Jobcentre Plus offices—the offices that are predominantly unscreened—have been in work since they opened last year.
	My hon. Friend is right. The evidence so far shows that with Jobcentre Plus, we see people more often, we can check facts more easily, and we can make benefit payments more accurately than in the past. I want to be clear. The Government intend to roll out the Jobcentre Plus offices throughout the entire office network. We do not believe that the strike is justified. Indeed, the fact that most of the staff in these offices have been in work since they opened tends to suggest that our approach is the right one.

Andrew MacKinlay: How extensive is fraud in relation to adopting the national insurance number and the name of another person? What measures are there to combat that? What measures are taken to inform other agencies when it is discovered, such as the police national computer, the Child Support Agency and credit agencies? This is a serious problem facing one of my constituents and, I understand, the constituents of many other people.

Alistair Darling: No matter where it occurs in the system, fraud is extremely serious, although in the scale of things, national insurance fraud is a lot less of a problem than, for example, people who falsely represent their circumstances. None the less, we take it seriously. My hon. Friend may be interested to know that about two years ago, during a pilot project in the Balham office in south London, we carried out far more extensive checks into people's identity. That resulted in a number of false claims being found, people being referred for prosecution and one or two people being deported.
	We are ensuring that we tighten up the system across the country. There are more checks, which means that some cases are taking longer to process, but that is inevitable.
	On swapping information across departments, we are looking at that. It is not straightforward. There are data protection and legitimate privacy issues to consider but I think that most of us and most members of the public take the view that if one arm of government knows something about someone, it is not unreasonable to expect another arm of government to know the same thing.

Sydney Chapman: The Secretary of State will know that the local government ombudsman for London has said that the housing benefits administration system is in chaos. Can he give an assurance that that administration will be radically improved, particularly in many London boroughs? Without that, there is no question but that the tackling of fraud will not be at its most effective.

Alistair Darling: As I said earlier, what is striking—this applies to London as much as to the rest of the country—is that some local authorities administer housing benefit well and others, in administration is appalling. I am determined to ensure that we drive up standards in those local authorities where standards are way below an acceptable level. That is the best way to bear down on fraud and error.

John Robertson: Does my right hon. Friend agree that not all cases of benefit fraud are due to the Conservative party, although we have tried to blame it for everything? Does he agree that perhaps the time has come for us to look at benefit fraud and at what happened in years gone by when the Opposition manipulated the figures and put people on benefit? It is time to get them off.

Mr. Speaker: Order. The policy of the Opposition is nothing to do with the Secretary of State.

David Willetts: I shall try to attack the Secretary of State as effectively as his own colleague, the hon. Member for Glasgow, Anniesland (John Robertson), did.
	Will the Secretary of State confirm that two reports from his own Department have shown that the targeting fraud advertising campaign that he launched has succeeded in persuading people that benefit fraud is "easier to commit"? He has spent £16 million on an advertising campaign, the main effect of which has been to persuade people that they can get away with fraud. Unusually for the Government, this an accurate advertising campaign because people are getting away with it, as questions from my hon. Friends have shown. Also, we know that, after all the hype about the targeting fraud website, it has led to just one successful prosecution, and that national insurance fraud—which he dismissed as being not very big in the scale of things—is estimated to be running at £400 million a year.
	Why are Ministers making the system so complicated? Would it not be better to get to the root of fraud by simplifying the system so that error does not lead tofraud, instead of having the Government's remorseless preoccupation with making all benefits more complicated, more prone to error and more prone to fraud?

Alistair Darling: The hon. Gentleman's argument would have more force were it not for the fact that no serious attempt was made to even measure fraud in the social security system until 1995, about 15 years after the Conservative party was elected to government. Also, there was no systematic measuring of fraud until after 1997, following the general election in that year. In that time, we have put in place a number of measures that, as I have said, are now beginning to bear fruit. The fact that I can tell the House that fraud and error in income support and jobseeker's allowance are down by 18 per cent.—something my predecessors could never have said—shows that our efforts are getting results.
	The hon. Gentleman asked about the advertising campaign. The campaign was designed to raise people's awareness of benefit fraud, just as the drink driving campaigns have raised awareness over the years. The research also shows that the public is becoming less tolerant of benefit fraud. It is important that we win people's hearts and minds on this matter because we need public support.
	Lastly, on the simplification of benefits, the hon. Gentleman and his predecessors who served in government will know that there is a superficial attraction to standing up and saying that we should simplify the benefits system. However, once it is discovered that such simplifications would involve removing people's right to support, we see—as I hope that he would accept—that the task of simplification is not as straightforward as he makes out. We do not want to end up by taking money away from people who should be getting it. However, we want to maintain our drive to tighten up the system to cut fraud and error, which is precisely what we are doing.

Welfare to Work

Karen Buck: What assessment he has made of the impact of welfare-to-work policies in London.

Malcolm Wicks: In London, more than 70,000 people have been helped into work throughour new deal programmes, including 42,000 young Londoners. In addition, more than 10,000 more have moved into work in some of the most deprived areas through employment zones and action teams for jobs. Altogether, our policies have helped to reduce unemployment in London by more than 30 per cent. since 1997 and long-term unemployment has fallen by nearly 60 per cent.

Karen Buck: Fraud is very important, but it is also important that those people who are entitled to benefits get the help that they need when they require it. It is of some concern to me that despite the national success of the working families tax credit in topping up the incomes of low-income families, Londoners are less likely to receive that benefit. In particular, low-income single parents are half as likely to receive working families tax credit as people in the country as a whole. Will the Government commit themselves to a research project to establish why we have these variations, and to find out how much of it is due to a lack of awareness and how much is due to structural problems that can be removed to make sure that Londoners get the help that they require?

Malcolm Wicks: I know of my hon. Friend's great interest in this matter in her constituency and London as a whole. I shall go through these matters with her to see whether there is a need for research. Across the country—including in London—the working families tax credit has been of enormous help to two and one-parent families. In London alone, some 95,000 families have benefited from the working families tax credit.
	In addition, 70,000 people in London have benefited from the national minimum wage. That demonstrates that along with making work possible for Londoners, and everyone else in the country, we also need to make work pay.

David Heath: Is not the hon. Member for Regent's Park and Kensington, North (Ms Buck) right to say that the key to the success of these policies is access? Given that the take-up of working families tax credit in her constituency and others in London is extremely low, will the Minister tell us what will happen when working families tax credit migrates to child tax credit in 2003? How will those who do not have bank accounts receive their credit if the universal bank is not up and running by then? Secondly, with 40,000 of his staff on strike today—a fact dismissed by the Secretary of State—is it not time that the Government and the management spoke constructively to their staff, to enable them to provide the advice that they should be providing to those who need it?

Malcolm Wicks: There was a lot there in terms of quantity, but the hon. Gentleman greatly inflates the number of people on strike. The strike has not been a success, and we urge people to return to work to make a success of what is already a successful project—Jobcentre Plus. We talked about fraud earlier, and just as we need to bear down on fraud—as we are doing—we need to enable people to claim the benefits to which they are entitled, in a variety of ways. We are pleased by the success of working families tax credit, and the new child tax credit will also be a success, but we will look at any sensible ideas for increasing take-up.

Ian Davidson: Does the Minister accept that part of the welfare-to-work programme involves an incentive, and that in London and other cities, such as Glasgow, where rent and council tax levels are higher, those in low-paid jobs do not have so much incentive to go into work because they lose their council tax and rent rebates when they do so? Would the Minister be prepared to consider the pilot project suggested by Glasgow city council to waive the loss of rent and rate rebates for a period for people going into work? If that project were successful, and if it were adopted elsewhere, it would undoubtedly assist people in London and Glasgow.

Malcolm Wicks: I recognise that we need to do all that we can to inform people about what will happen when they go off benefit full-time and go back into work. Many people are, understandably, ignorant about those effects. That is why, in Jobcentres and Jobcentres Plus, we do a "better-off calculation", to demonstrate to people exactly how much better off they will be in work. Many are pleasantly surprised at the result. That is because people still receive housing benefit when doing a low-paid job. They are also entitled to the minimum wage, and tax credits bite in with good effect.

James Clappison: Is not the Minister concerned that so few of those leaving the new deal in London are being taken on by central Government Departments? Is he not also concerned that, since March last year, when the Select Committee said that it was "extremely disappointed" by the failure of Departments to recruit more people from the new deal—and when the Minister's own Department promised to set up special programmes to encourage Departments to recruit more from it—the number being recruited by central Government has fallen still further? A few moments ago, the Secretary of State said that it was important for the different arms of government to work together. Is it not clear that, when it comes to the new deal, they are not? The Government are snubbing their own policies, and other Departments are snubbing the policies of his Department.

Malcolm Wicks: The hon. Gentleman talks from a position of some principle. That principle is that he is against the new deal. The fact is that we have enabled young people to enter different forms of employment in the public sector and in the private sector, and also to take routes into training and education. What the House needs to understand—and what the Opposition do not wish to understand—is that the new deal has been a great success in enabling people in London and elsewhere to get into the world of work.

Pensioners (Hospital Patients)

Laura Moffatt: What additional(a) financial and (b) practical help is offered to pensioners who are in hospital for more than six weeks.

Maria Eagle: There is no additional financial help, although community care grants may be available to help with fares for other family members to visit a person in hospital. After six weeks in hospital, a person with a basic rate pension would receive £58 a week, or £44.20 if they had no dependants. Housing benefit would remain in payment for people on the minimum income guarantee. In terms of practical help, every patient should have a discharge plan, including an assessment of their future care needs, developed from the beginning of their hospital admission. All hospital in-patients have access to a social worker. From this April, patients in every NHS trust will have access to a patient advice and liaison service to help them with their dealings with the hospital.

Laura Moffatt: I completely understand the principle behind the clawback from pensioners, but I was a nurse for many years and spoke to many couples who had a loved one in hospital, and the extra burden—including, as she rightly said, transport—is often difficult over a sustained period. I hope that the Minister can consider other practical measures to ensure that our pensioners do not suffer if they have to spend an extended time in hospital.

Maria Eagle: I assure my hon. Friend that the Department keeps all matters relating to all our benefits under review—but I must also make the point that in written answers on 8 January to my hon. Friend the Member for Dover (Mr. Prosser), recorded at columns 699-700W of Hansard, my right hon. Friend the Minister for Pensions made it clear that at present we have no plans to make any changes in the hospital downrating provisions. The principle of avoiding double provision is a key cornerstone of the system of national insurance; it was introduced more than 50 years ago, and has been supported on both sides of the House. Indeed, as recently as Thursday, Lord Higgins, who speaks for the Conservative party in the upper House, supported it by suggesting that one way round the problem that arises on the resumption of benefits would be to continue them throughout a hospital stay, but to charge the individual for rent, accommodation and so forth. That is the Tory answer.

Angela Browning: Can the Minister give some reassurance to Age Concern in Tiverton? I met its representatives on Friday night, and they expressed concern about the increasing number of elderly people in hospital who are demanding to be sent home just before the six weeks are up. One of the factors behind that is the long delay in getting their benefit books back after they have to surrender them for the adjustment. Is there no minimum turn-round time that the Benefits Agency has to work to? If so, it is not working in my constituency. Will the Minister take a particular interest, and do something about that?

Maria Eagle: I would be happy for the hon. Lady to refer those cases to me so that I can look into them in detail. The Department does have a target for those who are claiming back a benefit. The target for dealing with a new claim for income support and the minimum income guarantee is 12 days, and the latest figures show that in fact we turn such claims round in 9.4 days. For claims concerning changes of circumstance the target is four days, and our performance shows that in fact we turn those claims round in an average of two and a half days. If the hon. Lady is running into problems in her constituency, I shall be more than happy to look into them if she refers them to me.

Bill Tynan: Obviously I do not want to raise an individual case, because that sort of thing caused some controversy last week—but is my hon. Friend aware that there is concern, especially among elderly people, who are most vulnerable during a stay in hospital, and who may feel that they will lose all their benefits? Will she examine the situation and make sure that social workers give adequate information to the people who are most vulnerable?

Maria Eagle: I understand the point that my hon. Friend makes; it is important that when people are vulnerable in hospital they get proper advice. However, as I am sure everyone in the House would accept, giving people benefits advice when they are not feeling well could cause confusion and fear. There is no reason why the rules should not be well known—they have been operating for 54 years, since the beginning of the welfare state—and I hope that those dealing with vulnerable elderly people make the position clear to them. It has not changed recently.

Tim Boswell: It seems risky being a pensioner in hospital these days. Will the Minister at least acknowledge that there is fresh and growing concern about the hospital downrating rules? They may have been around since 1948, and be based on the principleof avoiding double provision, but will she at least acknowledge that there is a problem in getting clear advice to patients while they are in hospital? Even when they are sick, they may still be worried about their benefit situation. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, there may be a particular problem in getting people back on to their benefits when they leave hospital. The process needs to be streamlined as much as possible, so will the Minister undertake to discuss the whole project in good faith with Age Concern and others who have direct experience of the human and practical implications?

Maria Eagle: Of course we have ongoing discussions with Age Concern and other organisations with an interest in these issues and we will certainly continue to do so. This rule has been in existence for 54 years; the Conservative party was in power for 35 of those years and did not do anything about it. However, I notice that the Leader of the Opposition's Parliamentary Private Secretary has signed early-day motion 542, so perhaps that signals a change in the Conservative party position.I remind my right hon. and hon. Friends about the Conservative party's views on bed and breakfast in hospital, which was reiterated as recently as Thursday in the other place.

Mr. Speaker: Order. Perhaps we will leave that.

Pensioners (Annuities)

George Osborne: What plans he has to abolish the rule requiring pensioners to purchase an annuity by the age of 75 years.

Alistair Darling: It is important that pension funds built up with the support of tax relief are used to provide pensioners with a secure income in retirement. For the majority, buying an annuity is the best way of ensuring that they have a secure income throughout their retirement. We have no plans, therefore, to change that rule. The principle will underline the approach in the forthcoming consultation paper on annuities which was announced in the pre-Budget report last year.

George Osborne: Millions of pensioners will be disappointed with that answer and dismayed if the consultation paper rules out any reform of annuities. If the Government want people to save for their retirement, why do they not trust them to invest their savings in retirement? Will the Secretary of State and the Government support the private Member's Bill on annuity reform that received the overwhelming support of the House on Second Reading?

Alistair Darling: The Tories certainly turned up in force—that is true. The problem with the Bill's proposals and those which I suspect that the hon. Gentleman supports is that they would benefit only a minority of people who have retired. The average pension fund is at present some £30,000. Indeed, in the year 2000, the average amount used to buy an annuity was only £23,000. The proposals in the private Member's Bill and those commonly espoused by the Conservatives tend to be aimed at people who have pension funds of something like £250,000.
	The forthcoming consultation document will consider options to make the annuity market work better than it does, but we must have regard to anything that we do so that it does not adversely affect the general level of annuity rates. We need to ensure that we prevent any tax avoidance becoming commonplace because of changes that might be made. We also need to ensure that if tax relief is given to people to save for their retirement, that is what they use the money for, rather than avoiding using the money for their pension and relying on state benefits instead. The hon. Gentleman will see the consultation document in the not-too-distant future, but it is worth bearing in mind how many people would benefit from any proposal. We would not want only a few people to benefit, which is what I suspect the Conservatives have in mind.

George Mudie: Does the consultation paper deal with the bizarre and unfair situation whereby, on the death of the annuity holder, the remaining capital reverts to the institution and not the family? If the Secretary of State believes that to be a matter for the insurance companies, will he, in the short term, take steps to change the rule under which the tiny number of schemes that enable people to allow an inheritance to pass to their family can operate only when the money is invested abroad? That seems quite wrong.

Alistair Darling: I shall not go into the detail of what the consultation paper proposes, for obvious reasons. The House will see it in the not-too-distant future. However, if we were to change the rules, with the result that more and more people, on their death, could pass the remaining part of their pension fund on to their children or whoever, there would be less money in the system, which would adversely affect annuity rates for people who are currently pensioners. That is why it is important that any changes that the Government make benefit the majority of people. It would be wrong for us to put in place changes, which I think are supported by the Conservative party, from which only a tiny minority of the population would gain.
	I repeat that in the last year for which we have figures, the average amount used to buy an annuity was only £23,000. A very small number of people—something like 5 per cent. of the population—will have pension pots of £250,000 or so. It would be disastrous if we made changes that benefited only a tiny minority of people, making the majority worse off. We certainly do not want to get into such a situation.

David Willetts: But will the Secretary of State answer this simple question: why should a pensioner be obliged to buy an annuity if he or she has enough income to ensure that they will not be dependent on means-tested benefits? Provided that condition is met, what business do the Government have forcing them to buy an annuity?

Alistair Darling: The reason that people receive tax relief during their working life is to make sure that they can build up a pension for their retirement. Our concern is that if changes were made along the lines that I think that the hon. Gentleman supports, the majority of people would lose out because annuity rates would fall as a result of his proposals. That would not be a desirable course of events because it would mean—all other things being equal—that the state would have to pick up the bill for that change.
	No matter what changes we may contemplate in the future, it is important that we bear in mind the fundamental principle that tax relief is given to people so that they can save for their retirement. We do not want to change the rules and find that a majority of people are actually worse off.

David Willetts: It is no good the Secretary of State hiding behind this tax relief. Let me quote from a letter from the former Economic Secretary, who wrote:
	"there is no tax revenue reason why pension schemes should have to buy annuities."
	The Secretary of State cannot hide behind the Treasury to explain the policy, any more than Treasury Ministers can hide behind the Department for Work and Pensions to do so. This policy is one on which the Government suffered their biggest defeat in the House since 1997. That suggests that the policy is wrong and that it is about time the Government promised to give a fair wind to the Bill that received its Second Reading only a fortnight ago—aBill which would tackle, with no losers, a well- acknowledged grievance.

Alistair Darling: To put the hon. Gentleman's latter point in its proper perspective, we are talking about a private Member's Bill and it is certainly true that many Conservative Members happened to find themselves in London at about 2.30 pm on that particular Friday. Such things happen; successive Governments have had that experience and we live with it, as the hon. Gentleman well knows.
	On the central point, the Bill's proposals would mean that a 65-year-old man would need a pension fund of about £72,000 to derive an income that would put him above the minimum income guarantee. I remind the House that the average amount used to buy an annuity is nothing like £72,000; it is actually £23,000. The result of the proposals in the Bill that the hon. Gentleman clearly supports would mean that although some people—a minority—might find that they were better off, the majority might very well find that their annuity rates fell. That would not be desirable.
	The principles are clear. If people receive tax relief to save for their pension, we expect them to accumulate sufficient to live on in their retirement. We do not want people to avoid using that money for their retirement so that they can pass it on; nor do we want a situation to arise in which the majority of people would be worse off due to the changes that had been made. The consultation document will be put before the House and the general public in the not-too-distant future. No one should be in any doubt that the principle of annuitisation is important for the future of pension provision.

Departmental Accounts

Richard Bacon: If he will make a statement on the extent of and reasons for the irregular expenditure by his Department which has caused the Department's current financial statements to receive a qualified opinion from the Comptroller and Auditor General.

Alistair Darling: The Department's accounts have been qualified since 1988 for two main reasons. The first is fraud and error. Despite the first-ever reductions in fraud and error, the levels remain unacceptably high.The second problem is the poor state of the Department's information technology, which makes it impossible to track payments through the system. That problem is being addressed by a multi- million pound investment programme that will steadily replace the Department's out-of-date computer systems.

Richard Bacon: I am grateful to the Secretary of State for his reply. Will he tell the House whether he has a target date for the publication of a set of accounts that are not qualified because of fraud? Does he understand how much hard work goes into earning the money paid in tax that his Department then loses? If he takes fraud extremely seriously, as he said in an earlier answer, will he explain why he has still not answered my written question of 8 January?

Alistair Darling: In relation to the written question, I shall certainly make inquiries to see what has happened.
	On the more general point, I have said repeatedly this afternoon that the level of fraud and error in the system is unacceptably high, and has been so for many years. As I said, the accounts of the former Department of Social Security were qualified from 1988—indeed, according to the criteria used by the National Audit Office, they should have been qualified from 1948.
	The replacement of our IT systems, now under way, will enable us to track payments more accurately than we have done in the past. We have introduced other measures that have brought about a reduction in fraud and error of 18 per cent. in income support and the jobseeker's allowance. Those measures will be spread across the whole Department and we shall steadily bear down on fraud. But I have to tell the hon. Gentleman that I fully expect the next set of accounts to be qualified, and they are likely to be qualified for some time to come, until that investment and those improvements are fully put in place.

Peter Pike: My right hon. Friend has rightly said that none of us condones fraud. Does he think that there is full compatibility between computer systems in local authorities and various Departments using national insurance numbers to ensure that fraud is cut to an absolute minimum, by using those systems far more effectively than perhaps we have done in the past?

Alistair Darling: I agree with my hon. Friend. The short answer is no, the information technology systems are not compatible at the moment, but that will improve year on year. That is particularly important with regard to housing benefit for local authorities, but we are replacingthe Department's entire IT system. That should have happened at least 10 years ago; it is now well under way, and it will have a significant impact on our ability to control fraud and error in the system.

Patrick McLoughlin: Does the Secretary of State understand that no one will think his Department is acting properly so long as we receive letters from Ministers that include paragraphs and sentences such as this:
	"To take no account of DLA or SDP would have significant expenditure implications for the ILF, and the Terms of Reference of the quinquennial review required of the ILF's policies"? How on earth is anyone supposed to understand anything that goes on in that Department?

Alistair Darling: I hope that I did not sign that letter. If I did, I shall have another look at it. I do not understand it either, so I shall cause inquiries to be made.
	The hon. Gentleman raises a serious point, to which I attach some importance: in the past, too many letters from the former Department of Social Security, and I dare say other Departments, have not been written in a way that people would readily understand. We are making determined efforts to try to improve that, but just occasionally the odd letter slips through the net, and I hope that he will forgive us.

Personal Advice (Job Centres)

Lindsay Hoyle: What plans he has to increase the amount of personal advice available to unemployed people at job centres.

Nick Brown: The Employment Service and those parts of the Benefits Agency that deal with people of working age are being brought together to form Jobcentre Plus. Some56 Jobcentre Plus pathfinder offices have now opened, providing for the first time a fully integrated employment and benefit service. Reactions from individual customers and employers have been overwhelmingly positive. There will be a significant further roll-out of Jobcentre Plus across Great Britain from April this year.

Lindsay Hoyle: I welcome my right hon. Friend's answer, but what extra help and support can be given to those people with disabilities or to carers who wish to go to work? I wonder what we can do.

Nick Brown: There is a full range of services in the Jobcentre Plus network, and provided by the Department more generally, for those with disabilities and those who care for them. We find that carers tend to worry about their own prospects in the job market, as well as their responsibilities as carers. Very few of them are available for full-time work, but many are interested in part-time work. We also know from survey evidence that about1 million of those who currently receive incapacity benefit, and, in some cases, disability living allowance, would like to work if they had the opportunity to do so. The purpose of the new, new deal for the disabled, which is being piloted, is to try to help those who are disadvantaged in the labour market into the jobs that, with a bit of help and support, they can get.

Vincent Cable: What advice would those in jobcentres give to people such as Mr. Stephen Cann—one of my constituents—and a group of other long-term unemployed people from south-west London, who, having been expensively trained by the Minister's Department for 18 months as driving instructors, suddenly found a few weeks before the test that his Department had arbitrarily abandoned the course? In view of the information that I have given him, will he agree to investigate what seems to be a serious abuse of public money and a waste of people's lives?

Nick Brown: I am grateful to the hon. Gentleman for drawing the case to my attention. However, for the sake of completeness, I should point out that he did so at1.15 pm today. I am willing to consider the individual case, but it is very much the exception and not the rule. I will do what I can to help his constituents, because it is not the Government's intention that people should be left unable to complete their course because of a withdrawal of the project that was facilitating it.

David Cairns: My right hon. Friend will recall from his visit to the Jobcentre Plus in my constituency that it continues to provide an excellent service despite the fact that industrial action has gone on continuously since last September. Although I accept that there is undoubtedly a political element to the industrial action, does he agree that some of the people on strike have genuine and sincere fears for their safety as they administer the new system? Will he give an assurance and a guarantee that, as Jobcentre Plus is rolled out across the country, instances of misconduct and so on will be closely monitored and that the provisions, such as new security guards and closed circuit television, that have rightly been put in place to replace screens will ensure that those fears are ungrounded?

Nick Brown: I regret the strike very much. The people who are on strike are our employees and they help to deliver public services. I would very much prefer for us all to work together for a common purpose. That common purpose must be the modified, modernised and unified service that we are providing through Jobcentre Plus. It is the Government's intention to roll out the Jobcentre Plus model right across the country and to maintain the very high standards that we had in place for the pilot schemes. Moreover, early evidence from the Jobcentre Plus premises is that open planning, the ability to make appointments and the modern and proactive way of working are welcomed by clients and have reduced the number of incidents that take place on the premises.
	Although it is early days, Jobcentre Plus is turning out to be a stunning success for all those reasons. I urge those Members who have not yet visited a Jobcentre Plus premises to make such a visit so that they can see the differences and changes that we have made by investing public money and so that they understand what we are trying to do. It is not the old service with the screens down, as some allege, but a brand-new service and brand-new way of working in brand-new premises.

Paul Goodman: Is the Minister aware that, in my constituency of Wycombe, there is evidence to suggest that personal advisers have only an hour a week in which to follow up the cases of individual clients? Does he think that that is good enough? If not, what does he propose to do about it?

Nick Brown: The Government are strongly committed to proactive working with jobseekers. If the hon. Gentleman sends me his evidence about the amount of time that caseworkers can spend on individual cases, I will be happy to consider it. However, I have no evidence to suggest that not enough time is being allowed to deliver the service in the modern way that the Government have set out.

Frank Field: I hope that the Government will be supported in these and similar policies. Does my right hon. Friend accept that, in a significant number of areas around the country, there simply are not enough jobs for the people who want to work?

Nick Brown: There are localised difficulties in some parts of the country, mainly in those constituencies, such as my right hon. Friend's and mine, that were over-reliant on single industries. Of course, we realise that those communities face special problems, but none of that detracts from the generality of the Government's approach, which is that the jobs are out there and that, by proactive work, we can get the people into them. About6 million of our fellow citizens changed jobs last year and we know of a third of a million job vacancies in the United Kingdom economy today. The jobs are there; we need to help people into them.
	My right hon. Friend is right to point to the difficulties faced in industrial communities that were over-reliant on jobs that were mostly in heavy industry. However, citing local difficulties does not detract from the Government's general approach which has, after all, seen record numbers of people in employment.

Relationships (Civil Registration) Bill

Jane Griffiths: What assessment he has made of the impact the enactment of the Relationships (Civil Registration) Bill would have upon the work of his Department; and if he will make a statement.

Malcolm Wicks: The Department is participating in work across Government to review the Bill's implications. This work has just started and therefore we are not yet in a position to reach a judgment.

Jane Griffiths: I thank my hon. Friend for that encouraging reply. He will know that some 88 per cent. of pension schemes in the private sector make provision for unmarried partners. He will also know that in the House last year, hon. Members voted to provide that protection in our households, should we wish it. Does he agree that the continuing deliberations in his Department should take into account the fact that to seek to deny to public sector workers what we have awarded to ourselves is nothing short of bad faith?

Malcolm Wicks: Occupational pension schemes need to make their own judgments and examine the cost implications of those. Our review has only just started. It is important that we think the matter through carefully in terms of trends and many other issues. As I said, we are not yet able to reach a judgment, but the review is ongoing.

Andrew Selous: Given the new research from the Office for National Statistics, which shows that children of married couples are half as likely to see their parents separate as children of cohabiting couples, and given that the report on the costs of family breakdown for the Lords and Commons family and child protection group conservatively estimates the costs of family breakdown—not least to the Minister's Department—to be about £15 billion a year, will the Minister be circumspect about the registration of civil relationships, not least because the country is unlikely to be able to afford it?

Malcolm Wicks: Before entering the House, I spent10 years at the Family Policy Studies Centre examining such issues. I understand that children from all sorts of family backgrounds are often the victims of the revolution that has affected family life in this country and many others. I do not think that the issues are directly relevant to the review that we are undertaking, on which we shall deliver a judgment when we can.

Employment Statistics

Mark Francois: If he will make a statement on the number of people in employment in the United Kingdom.

Nick Brown: The number of people in employment is 28.2 million—a new record level. There are 252,000 more people in work than a year ago, and 1.33 million more than in 1997. We are committed to employment opportunity for all, which is why we have introduced Jobcentre Plus, extended the new deals, increased the number of action teams for jobs and introduced the rapid response and StepUp initiatives.

Mark Francois: I thank the Minister for that reply. Can he explain why unemployment under both the claimant count measure and the International Labour Organisation's measure has been rising for more than three months? Why is it that unemployment is going up on this Government's watch, and what are they doing about it?

Nick Brown: It is always disappointing to hear of rises in unemployment, but the hon. Gentleman must put it in context. We have record levels of employment in the economy. Some 6 million people changed their jobs in the last year, reflecting the mobility in the labour market. For the hon. Gentleman to suggest that that is evidence of a growing national crisis is very mistaken.
	The Government have the right policies to bear down on unemployment by the proactive management of the labour market. There would be cause for concern if the jobs were not available. However, the Government know of a third of a million jobs that are available in the British economy, and we believe that the total number of available jobs in the economy that are reported to us is about a third of the total.

David Miliband: I hope that my right hon. Friend remembers with fondness his trip to South Tyneside on 7 January. It included a visit to the action team for jobs that is helping to tackle unemployment and raise employment in a part of the country that has not yet benefited as much as it might have from the economic growth of which the Government are justifiably proud. Has he had a chance to think about the plea from that action team to extend its service from just six wards to the whole borough?

Nick Brown: Yes I have, although I cannot make an announcement on that today. I was very impressed by the work that I saw being carried out by the action team in my hon. Friend's constituency. It deals with an employment base that I know well, as it is very similar to the constituency that I represent on the other side of the river. There are structural difficulties with the labour market and yet local people, making the best possible use of the Government's initiatives, are working hard to overcome them. I congratulate everyone involved.

Private Pensions

Crispin Blunt: What targets his Department has to increase private pensionprovision.

Ian McCartney: As I said in November—it seems such a long time ago. [Laughter.] A civil servant with a sense of humour. As I said in November, we are committed to encouraging private saving to meet the long-term challenges of an ageing population, and we remain committed. That is why we are introducing the pension credit, making sure that it pays to save, and why we have introduced stakeholder pensions, which are a secure, value-for-money method of making private provision. We have launched the simplification review to reduce the layers of regulation which increase costs; we have replaced the minimum fund requirement; and we are implementing the recommendation of the Myners review. Our pension education campaign is driving home the message that saving now is the best way to guarantee security tomorrow.

Crispin Blunt: I think that that means the Minister accepts that the success of private pension provision is an essential national economic interest, not only for the future wealth of pensioners but because it has to date given the United Kingdom vastly more resources to invest in the UK and around the world than are available to equivalent countries in the European Union. All that is threatened by the triple whammy of increased regulation, the taxation of pensions and the fall in annuity rates. Does the Minister accept that if policy does not change, we will be on our way to a long-term calamity of missed opportunity in this area?

Ian McCartney: As far back as the 1960s, generations of colleagues on this side of the House have been in favour of a robust private sector. I remind the hon. Gentleman that the last Conservative Administration, rather than bolstering savings for pensions, got involved in the mis-selling of tens of thousands of pounds worth of policies. It has taken this Government to replace that resource because of what the Conservatives did and the shambles that they left behind.
	As I said in my earlier reply, we are sympathetic on regulation, which is why we have set up the Pickering review. We are sympathetic about changes in the market, which is why the Sandler review has been set up. Not only are we sympathetic but we want to work with the industry, which is why both reviews are very open to the industry and the organisations that represent current and future pensioners. At last we have a Government who have a long-term vision for pensions, both in the public and the private sector.

Paul Holmes: What measures will the Government take to deal with the abuse of final salary pension schemes? In the past eight months, workers at two companies in my constituency have discovered that their final salary schemes have become almost worthless. Last week, in an Adjournment debate, we heard about the problems that have arisen throughout the country concerning United Engineering Forgings, which has gone through exactly the same process, along with five or six other companies including Chesterfield Cylinders in my constituency. No laws were broken; it was effectively legalised robbery of private final salary pension schemes into which my constituents had paid, in some cases for up to 35 years, only to find that most of their money had gone when it came to the pension scheme paying out. That has also happened to other firms—

Mr. Speaker: Order.

Ian McCartney: I suggest that the hon. Gentleman puts in for an Adjournment debate, so that we can openly debate the specific circumstances. If he wants to raise issues concerning a particular company, he is welcome to write to me. We take strong action on these matters, which is why we have OPAS, the Office of the Pensions Advisory Service, and OPRA, the Occupational Pensions Regulatory Authority, and we have set up a quinquennial review on pensions. We are committed to ensuring that we assist pensioners by trying to rub out fraud wherever it takes place.

Benefit Fraud

Angela Watkinson: What progress has been made in reducing benefit fraud since June 2001.

Malcolm Wicks: As my right hon. Friend the Secretary of State made clear earlier, we have already delivered an 18 per cent. reduction in the level of fraud and error in the payment of income support and the jobseeker's allowance—that is against a target of 10 per cent.—and we expect that good progress to continue. From April, we will begin to implement new powers in the Social Security Fraud Act 2001 which will further strengthen our fight against fraud.

Angela Watkinson: The level of benefit take-up in my constituency is remarkably low compared with the level of need, which is due in part to the complexity of the application process and to the complexity of individuals' own circumstances. Does the Minister recognise the strong link between the reduction in benefit fraud and the release not only of additional funds for genuine claimants but, as my hon. Friend the Member for Wycombe(Mr. Goodman) pointed out earlier, of additional time to enable social security staff to deal with the very complex needs of genuine claimants?

Malcolm Wicks: The purpose of Jobcentre Plus is to do precisely that. We need to ensure that everyone behaves responsibly by claiming only the benefit to which they are entitled and no more, and that everyone is clear about the fact that they have the right to claim their entitlement. That is our aim throughout our entire modernisation programme. However, let there be no mistake—fraud is a major problem. We are not complacent, but the targets have been exceeded and we are beginning to win the war against the fraudster. The whole House must join in that endeavour, so that the money raised by taxpayers can be spent on the priorities, not on the fraudster.

Reconstruction of Afghanistan

Clare Short: I would like, Mr. Speaker, to report to the House on the Afghanistan reconstruction conference which was held in Tokyo last week. The conference marked the turning of the focus and attention of the international community on to the reconstruction of Afghanistan. I believe that we now have an important opportunity to provide the people of Afghanistan with the real chance of a better future.
	The conference lasted from 21 to 22 January and was attended by Ministers and representatives from 61 countries and 21 international organisations. It was co-chaired by Japan, the United States, the European Union and Saudi Arabia. Chairman Hamid Karzai led a strong delegation from the Afghan Interim Administration, I led the United Kingdom delegation, and there were delegations from the World Bank, the International Monetary Fund, the Asian Development Bank, the Islamic Development Bank and United Nations agencies. Kofi Annan also attended and addressed the conference. In the margins of the conference, experts met to discuss military demobilisation, military and police training, de-mining and narcotics.
	Chairman Karzai, who performed impressively throughout the conference, outlined current and future priorities for the reconstruction of Afghanistan. A 21-member commission is to be set up through the offices of the UN to oversee the emergency Loya Jirgah process, which will lead to the establishment of a full transitional Government in five months' time.
	The Interim Administration's priorities for the next few months—on seeing the list, one understands the task to which we must rise—will be to expand emergency assistance programmes; to establish an effective Government administration; to provide peace and establish the rule of law; to ensure that as many children as possible, especially girls, are in school when the new school year begins on 1 March; to begin to reconstruct the country's shattered infrastructure, in particular, roads, electricity and telecommunications; to rebuild an agricultural system and eliminate poppy cultivation; and to accelerate mine-clearing.
	The conference was clear in its conclusion that women's rights and women's empowerment should be fully honoured and mainstreamed throughout all programmes during the reconstruction process. Chairman Karzai stressed the Interim Administration's commitment to responsible economic management, transparency, efficiency and accountability. He also made it clear—and we strongly agree with him—that Afghan ownership of the process of reconstruction will be vital to its success and to the full implementation of the Bonn agreement.
	We have the best opportunity in a generation to bring about development and lasting stability in Afghanistan. We must build on the lessons learned from previous efforts to reconstruct failed states such as Cambodia, Kosovo, Sierra Leone and East Timor. That experience makes it clear that the United Nations must play a pivotal role, and that we must continue to strengthen the capacity and effectiveness of the UN system to undertake the task.
	The conference recognised and greatly appreciated the role that the special representative of the Secretary- General, Mr. Lakhdar Brahimi, has played and his continuing role in promoting peace and stability in Afghanistan. We will need to continue to support his efforts and those of the United National Development Programme, which has been appointed to co-ordinate the early recovery efforts on behalf of the UN system.
	It will be crucial to maintain and enhance the existing humanitarian effort while putting in place arrangements for long-term reconstruction. UNICEF will lead the effort to reopen schools. The World Health Organisation and UNICEF will work with the Red Cross to improve health care, and the UN mine action service will lead and co-ordinate the de-mining effort. The World Food Programme will continue to supply food for 6 million people; it will also develop food-for-work schemes across the country so that local communities can begin to rebuild, plus feeding schemes in schools that are focused especially on encouraging girls' attendance.
	We must also make urgent efforts to strengthen the Interim Authority and build their capacity to lead the reconstruction effort. To take that process forward, a common trust fund will be established and we will work to encourage co-ordinated support for the Interim Authority's strategy, rather than a proliferation of donor projects provided directly by different countries, which might undermine the Interim Authority.
	The preliminary needs assessment undertaken by the World Bank, the Asian Development Bank and the UNDP to prepare for the conference concluded that Afghanistan's funding requirements would amount to just over $10 billion over the next five years. At the conference, $4.5 billion from 36 countries was pledged, including $1.8 billion for 2002, which was more than was requested for that year. I announced a commitment from the UK—funded from the Department for International Development—of £200 million over the next five years. In addition, my Department will make substantial contributions through the EC, the World Bank and the Asian Development Bank. This commitment is additional to the £60 million that we have allocated in the current financial year for humanitarian and recovery assistance.
	Since my last statement to the House, much has been achieved in Afghanistan. The conference in Tokyo was an excellent example of how the international community can achieve results when it works collectively. However, there is still a great deal to do. The humanitarian situation in Afghanistan remains fragile and it is not yet clear whether there will be a fourth year of drought, but there is a real danger that there will be. We should strongly congratulate the UN system and particularly the World Food Programme on having averted a major humanitarian catastrophe in Afghanistan, and we must be clear that these efforts will have to continue for some time while arrangements for long-term reconstruction are put in place.
	The most urgent issue that now needs to be addressed is the need to provide security across Afghanistan, and begin the process of demobilisation and disarmament and the building and training of an Afghan army and police force. As a first step, the UK has offered to work with the Afghan Interim Administration on a scoping study. The greatest danger to the future of Afghanistan is the risk of mounting disorder, criminality and faction fighting, which will create an obstacle to the reconstruction effort throughout the country.
	With the Taliban removed, the Interim Administration in place and the widespread commitment by the international community to the future of Afghanistan made clear in Tokyo, there is real hope now for a better life for the people, and especially for the children of Afghanistan. We must not fail to grasp this opportunity.

Caroline Spelman: I welcome the statement and thank the Secretary of State for letting me have a copy of it in advance.
	The £200 million announced in Tokyo to fund reconstruction in Afghanistan is extremely welcome. Many were quick to suggest that the west would bomb Afghanistan and then abandon it again. It is encouraging to see that that is not the case.
	I share the right hon. Lady's belief that the people of Afghanistan now have a chance of a better future. We should pay tribute to all those who are engaged in liberating Afghanistan from the Taliban and al-Qaeda. I wish them success in completing that task.
	When I was in Pakistan, local Afghan aid workers impressed on me the need to work with and through the new Administration. Does the Secretary of State accept that with the difficulties facing Afghanistan, reconstruction will fail unless the basic infrastructure of the new Government is in place? Given her high praise for Hamid Karzai, which I am sure is entirely justified, does she accept that reconstruction is something that is done with a country and not to a country?
	Our key concern is that Afghanistan should see the pledges of reconstruction money turned into reality simply and effectively. Is the right hon. Lady satisfied that the reforms to EU development assistance are sufficiently well advanced to make that a good vehicle for a significant proportion of our aid giving?
	We welcome the shift in emphasis in EU development assistance towards poor countries like Afghanistan. Learning the lessons from Kosovo, what assurances has the right hon. Lady received that this assistance will take on board the regional context? Many of the surrounding countries are poor and fragile. For example, only today, the entire regional government of Kurdistan resigned. Does she agree that intervening unilaterally in one country could destabilise others in the same area? The quality of co-ordination of the aid efforts will be key to the success of reconstruction. Can the Secretary of State reassure the House that DFID's staff deployment will be sufficiently senior to ensure prompt and effective decision making?
	The Secretary of State will be aware that more than 4 million Afghan refugees are in Iran and Pakistan. Remarkably, since 1998, the United Nations High Commissioner for Refugees has repatriated 4.6 million Afghan refugees. Could the Secretary of State confirm whether there is provision in the reconstruction package for the repatriation of refugees? Looking at the long-term rehabilitation of Afghanistan, the international community will need to consider debt relief. Even before 11 September, Afghanistan had substantial overhanging debt. Can she give assurances that she will look imaginatively at ways of helping the new Afghan Government to deal with debt relief? In that regard, I welcome the news that a trust fund is to be established.
	The Secretary of State twice mentioned the need to stamp out opium production. Does she accept that getting proper irrigation systems in place should be prioritised so that alternative crops can be grown? As I am sure she is aware, I am determined to help land mine victims in Afghanistan. I welcome the news of the involvement of the UN mine action service in what she described as accelerated land mine clearance. However, I draw her attention to the problems of land mines in the border region between Pakistan and Afghanistan; there is a real fear that as Afghan refugees return through those tribal areas, more may become land mine victims.
	We welcome the commitment to women in the reconstruction process. What assistance could be given to Afghan women refugees in this country to encourage them to return and play an active part in restoring their country's fortunes? Finally, I welcome once again the Government's statement and the results of the Tokyo conference. If we can reconstruct Afghanistan properly, that will be another victory for the war on terrorism.

Clare Short: I am grateful to the hon. Lady, and agree with her. If she remembers, at the beginning of the crisis, there were some elements or loud voices in the United States, but not in the Administration, who said that nation building was none of our business. Anyone who took that position is now seeing the error of their ways. Terrorist groups, criminals, drug dealers and disorderly forces who want to be destructive and spread hate and violence in the world are nurtured by, and hide themselves in, failed states.
	We always need the capacity to prevent such action and to build efficient modern states that are part of the international community so that it is not vulnerable to terrorist organisations such as those responsible for 11 September. In the case of Afghanistan, everyone should be haunted by the great error that was made after the Soviet withdrawal, when everyone left and armed groups took over the country; there was no order, leading to the rise of the Taliban and everything that has flowed from that. We owe it to ourselves and the people of Afghanistan not to make that error again.
	The hon. Lady asked whether the reforms for which we have been working hard since 1997 in the European Union's development efforts are sufficiently advanced to trust that they will make a contribution in Afghanistan. A serious reform effort is in place, but it needs to be fully implemented. However, we were committed to a much bigger proportion of our funding going through the European Commission by the previous Administration. We therefore worked hard to get the Commission to commit to considerable spending in Afghanistan, as a proportion of our money had to go through it anyway and could well have been spent on less needy countries. The Commission is not the most efficient operator, but at least we should direct the money to the right sources. We should try to collaborate with the Commission to make sure that the money that has to be funnelled through it is spent well in Afghanistan; that is the task in which we will be engaged.
	I agree with the hon. Lady very much that Kurdistan, Uzbekistan, Turkistan—all the "Stans"—are in enormously bad shape. Some of them are poor, highly indebted and full of instability. Just as we have got a chance in Afghanistan and Pakistan, we need to work with the "Stans" to try to lift that world region, overcome the problems of terrorism and conflict and give all the people a better chance. My Department is looking to make a bigger effort in co-ordination throughout the "Stans" in the hope that that part of the world will have a better future.
	I promise the hon. Lady that my staff will be deployed at the right levels. I have said it before, but it really is true: they are respected and honoured throughout the international system and I am sure that they will make a leading contribution in Afghanistan. We shall try not just to introduce a UK programme, which we would do well, but get behind the Interim Authority and build up their capacity and work with the World Bank and the UN to get the co-ordination effort going properly, which is a more difficult but important task that must be carried out.
	On refugees, the UN humanitarian agencies made a separate appeal for short-term help. We will have to assist refugees to return home, but they should not be forced. The big job is to build up the country. Living in refugee camps in Pakistan is a miserable life and I am sure that people will want to go home, but they must be supported until they are ready and then be helped with getting home and reconstructing their houses and agricultural lands.
	I do not believe that Afghanistan has a large debt problem, but I shall look at that again. It has been so cut off from the international community for so long that it has not racked up lots of debts and the subject has not been mentioned by any international agency in preparing for reconstruction, but I shall consider the question and write to the hon. Lady.
	Fields have already been planted with opium this year and we need to move quickly to ensure that the crop is not brought to market to carry on the corruption that drug dealing leads to. I agree with the hon. Lady that we need to restore irrigation. Lots of irrigation systems were destroyed during the bombing in the war against Soviet occupation, but destroying the irrigation alone is not enough, because that could lead to better poppy cultivation.
	We must offer people alternative crops and a better legitimate life so that they do not want to be part of an illicit and corrupt drug-dealing life. These are very poor people who do not use drugs, which became the only alternative crop for them to keep their families alive. We must make them a better legitimate offer that they want to be part of.
	Afghanistan was littered with land mines before the recent crisis and a high-quality UN operation was already working there. Now the conflict is over, it has a real chance to work throughout the country to clear up all the land mines. The operation assesses where the mines are and has programmes to warn refugees—a massive effort will be made. There is a genuine chance to clear the country of mines, if we can prevent it from returning to conflict.
	The hon. Lady's last point was about helping skilled women refugees in this country to return to their country. The International Organisation for Migration has set up a register of all Afghans—most educated Afghans have left the country and are refugees across the world—to record their skills and talents and to link them with the needs of the new Administration so that people can be helped to return home permanently or temporarily to assist with rebuilding their country.

David Winnick: My right hon. Friend's statement will be welcomed on both sides of the House. She mentioned the rule of law. Will the barbaric practices of cutting off hands and stoning people to death for alleged sexual reasons finally be ended? Would it not be a good thing for those practices to go for good in a liberated Afghanistan?

Clare Short: Yes indeed. The whole country has been liberated and it is absolutely clear that people from all parts of Afghanistan are overjoyed that the Taliban no longer rule. Some of the most barbaric practices that came in with the Taliban are already disappearing, and they were never supported by the people of Afghanistan. I completely support my hon. Friend's point.

Jenny Tonge: I thank the Secretary of State for letting us have sight of the statement in time for us to be able to comment on it and I welcome greatly her awareness of the needs of the "Stans"—I also refer to those countries as such. The whole of that area of central Asia is suffering the same drought from which Afghanistan has suffered. I welcome her statement that they will get help too and that the drought has been taken into account, but, mindful of the appalling health statistics and, in particular, maternal and child mortality rates in Afghanistan, what proportion of aid will go on health care?
	Lastly, it is outrageous that the money for reconstructing Afghanistan is coming from the Department's budget, not the Treasury contingency reserve. Is the right hon. Lady not angry that, once again, her Department alone has to pay for damage inflicted on behalf of the international community?

Clare Short: I very much agree with the hon. Lady's first point. This new situation is a real opportunity for the whole area: Pakistan, Iran and all the "Stans". There is oil and gas in that part of the world, but they have not been able to get it out because pipelines could not be built as there has been so much disorder. There is now a real chance that all those countries can be helped to build up their economies. The problems in Afghanistan were spreading and corrupting the state, which led to growing drug use in all the neighbouring countries. The whole region has suffered from desperate poverty, so the reconstruction programme represents an important opportunity for it.
	I cannot at the moment tell the hon. Lady how much will be spent on health care. The World Health Organisation, UNICEF and the Red Cross are already moving rapidly to expand immediate health care and immunisation. The Red Cross has been helping land mine victims for some time. There will be an immediate effort to improve health care while the Health Ministry and the country's long-term, sustainable health care system are being built up. As the work goes on, I shall be able to give the hon. Lady the figures that she has requested.
	I need to explain how my Department's budget works. We have a contingency reserve within the Department that we deploy as emergencies arise in the world. Of the £60 million that we have found since 11 September, £10 million or £20 million was contributed by the Treasury, but the rest came from my Department. The sums that we are now deploying come from my Department. That is right, provided that we have enough in our contingency reserve. If there were crises all over the world we would need additional funding. Let us hope that there are not.

Joan Ruddock: I congratulate my right hon. Friend on her considerable achievements in Japan, and on her positive and continuing support for women's rights. Does she share my concern that the Minister for Women in Afghanistan is working out of her front room with one cell phone and one personal computer, and has no staff and no resources? Can my right hon. Friend tell us when Sima Samar will get the resources to build up that critical Ministry within the Interim Administration?

Clare Short: Yes. I had a meeting with Jim Wolfensohn while I was in Tokyo. The UK and other countries agreed that we will immediately resource the Ministry for Women's Affairs in Afghanistan, and the preparations for that are going on as we speak.

Tony Baldry: The results of the Tokyo conference are very welcome, as is the United Kingdom's contribution. Is the Secretary of State aware that when the Select Committee on International Development was in Brussels last week, European Union Commissioners made it clear to us that for the EU's contribution to Afghanistan it had to raid every cupboard, and the larder is now bare? Afghanistan is not the only failing state. Does not that show the need to ensure that the EU development budget is as poverty-focused as the UK budget? It seems daft that we give money through the EU to countries such as the Czech Republic and to support the Moroccan fisheries agreement when many countries in Africa are, in their different ways, in as dire need as Afghanistan.

Clare Short: The hon. Gentleman is absolutely right. Under the Cotonou agreement the European Development Fund is poverty-focused, because it is for Africa, the Caribbean and the Pacific regions. People who speak for the Commission always say that that is its poverty focus, but the other half of its development budget is focused on Europe's middle-income countries, which is money not well spent. There is an underspend on Asia, which is why the Commission has had so much difficulty making money available for Afghanistan. The balance of the spend is going even further away from poverty. We are making a major effort to reform that process, and I am grateful for the hon. Gentleman's support. We must seek support across the European Union. The transfer of resources to middle-income countries does not help reform. They should look after their own poor, and they need help to restructure so that they can do that, but the resource stream should go to poor countries that need investment to improve their performance.

Ann Clwyd: Does my right hon. Friend agree that a much larger international security force needs to be deployed throughout Afghanistan? It is not sufficient to have that force in Kabul alone. It should be deployed throughout the country, so it must be increased. As my right hon. Friend knows only too well, aid is still not reaching parts of Afghanistan, because of the difficulties of security. Every night, children die in camps because of inadequate aid.

Clare Short: My hon. Friend is absolutely right. As I have said, insecurity, criminality and fighting between factions pose the greatest threat to our ability to deploy resources well, start rebuilding the country and give people hope for a better future.
	Throughout the crisis, when the press pretended to know all there was to know about Afghanistan and people tended to repeat what the press said, it was widely suggested that it would be entirely unacceptable to deploy an international force in Afghanistan. In fact, the deployment has been welcomed massively in Kabul: people desperately want the security that an international force will bring.
	The suggestion that there should be an international force in all major cities is not an easy proposition, but the Interim Authority have called for that. We should respect the proposition, examine it, and see whether the international community can respond to it. At the same time, however, we must get on with the job of demobilising all the armed factions and building an Afghan army. We want those people to hand over their weapons in the hope of becoming part of an army, or a proper police force, and indeed taking other jobs.
	That is the real hope for the future. We need to consider how the international force can be enhanced, and how, as rapidly as possible, we can demobilise the factions and create legitimate security forces led by Afghans.

Peter Tapsell: Does the right hon. Lady agree that, although it is obviously vital in the short term that Afghanistan's rather antiquated irrigation system should be repaired—notwithstanding the fact that it is one of the chief causes of rivalry between the tribes—what Afghanistan needs in the longer term is a much greater supply of water and power? It so happens that its geographical configuration—the positioning of its rivers, valleys and mountains—is ideal for the building of power dams like the Kariba and Aswan dams. Will the right hon. Lady point out to our American allies that when President Roosevelt launched the new deal he put the Tennessee valley dam system at the forefront of it, and that by spending a good deal less than they have spent on bombing Afghanistan, the Americans could give it a proper dam system?

Clare Short: I agree that Afghanistan needs a new deal. These are hard-working, enterprising people who have managed to cope in the most difficult circumstances. It was Afghan lorry drivers who kept food moving throughout the crisis and Afghan workers who continued the emergency humanitarian effort when all the international staff were withdrawn.
	I agree that our efforts should be focused on empowering Afghans to run their own country, and giving them proper irrigation and power systems. I do not know enough about the geography to know whether dams are appropriate, so I cannot comment on the soundbite, but I concur with the broad sentiment.

Donald Anderson: The human infrastructure is vital. Can my right hon. Friend tell us a little more about the register of refugees?
	Because of the disorder, instability and insecurity of the past 20 years, many professionals have fled Afghanistan—who can blame them?—and found more comfortable lives outside their country. What incentives can be given to such people, including those in the United Kingdom, to return to Afghanistan—if only for brief periods—and give of their talents?

Clare Short: This is a feature of failed states. Most educated Sierra Leoneans are not in Sierra Leone; many are in Britain, making important contributions. Because of Guyana's history from the 1950s on, many highly educated and indeed political Guyanese are in the UK rather than Guyana. They are welcome, and they make an important contribution in our country; but the presence here of an educated group who are the first people needed to restore a country are not in that country when reconstruction begins.
	Afghans working in the World Bank have gone back, and are starting to help support the reconstruction effort. Afghans all over the world are being asked to register their skills on the register from the International Organisation for Migration. The aim is to provide a gateway to deliver information about all the projects and recruitment taking place in Afghanistan.
	We will do our best to facilitate the recruitment of Afghans. Many who have been away for a long time and have children at school will find it impossible to uproot themselves and go home, but many will want to engage for a time in the reconstruction of their country, and the necessary arrangements are in place.

Elfyn Llwyd: I welcome the content of the right hon. Lady's statement and the great progress that seems to be being achieved. I have two brief questions. It is obvious that Afghanistan cannot wait to have an Administration who develop the capacity and competencies necessary to build the infrastructure that can reach down to local level. What steps are being taken to ensure that the aid moneys will reach community levels as well as the Interim Administration? Can she say anything about the role that Afghan civil groups, the ordinary people of Afghanistan, including women, will have in the way those moneys will be spent?

Clare Short: The hon. Gentleman is absolutely right. It is important for the authority of the Interim Administration and the success of the Bonn process—going from a transitional Government to elections, including all the people of Afghanistan and all the ethnicities so that there is a stable long-term future—that the Interim Administration deliver across the country to all localities. We are very aware of that but all the administrative structures have been broken. What is needed is easy to conceptualise but not so easy to achieve.
	It will be possible—the United Nations system is lined up for this—to go into a humanitarian-plus phase. The World Food Programme, for example, will say to every community, "What do you want to rebuild?" It will look for groups, particularly women-led groups because they tend to be the most practical in local communities, and ask, "Is it the school or road you want to rebuild?" Then food for work could be introduced. People could start rebuilding across the country. Similarly, schools could be opened across the country, with food provided for children who go to school; that tends to incentivise girls to go to school.
	Already there is an effort to pay civil servants across the country. The Interim Administration are paying, but I was insistent in Tokyo that we ensure that those civil servants are doing something real. I assure the hon. Gentleman that we are aware of the point that he makes and determined to deliver to the localities so that money is properly spent.

George Howarth: I welcome the positive and constructive role that my right hon. Friend and her Department are playing in reconstructing Afghanistan. I welcome too the fact that one of the objectives that came out of last week's conference in Tokyo was the elimination of poppy cultivation. Has she seen recent press reports that there has been a step increase in the planting of poppy fields in Afghanistan while attention is elsewhere, and apparently open trading of heroin in Kabul market? Will she impress on the Interim Administration the fact that that is wholly unacceptable?

Clare Short: I have already said that more poppy has been planted. If the House pauses and thinks for a minute, that is inevitable. These are people with nothing: no seed, no tools. They have been growing poppy to survive; they have not been using it. Without some external intervention, they have nothing else to plant and no other way to make a living.
	There is no doubt about the commitment of the Interim Administration. They made that clear in Tokyo but they need the capacity. They have banned the cultivation of poppy but need the capacity to intervene. That crop needs to be rooted out. Local people must be offered an alternative. Have we not learned from Latin America that we cannot just destroy a crop and offer onions, or whatever it may be? We must offer people a legitimate life that will be better than the illegitimate life: the chance for their children to go to school, the chance to begin to get public services.
	I agree with my hon. Friend that this matter is urgent. We are focused on the urgency but we must help the Interim Administration to do something about it, not just shout at them. They are determined to stop it, but capacity is their problem.

Andrew MacKay: I too warmly welcome the Secretary of State's statement. Are there any early lessons to be learned yet from the delivery of aid, which seems to have been very varied across Afghanistan? For example, Herat seems to be the success story. Is that because the local governor is Ismail Khan? Is it because Iran is rather more logistically effective at getting aid through than what she called the various "Stans", which are less developed?

Clare Short: I follow these matters closely, but it is not my understanding that things are particularly better in Herat, which we know was a fine, ancient and civilised city that has now been destroyed. Communities everywhere are restoring themselves, but I am not aware that things are better in Herat. My own view is that no one can praise the UN system enough for the way in which it has coped through the crisis. Just think; some 6 million people daily are absolutely dependent on the food trucked in by the World Food Programme as the crisis, the fighting and the bombing have been going on. The system has held up and the food has been getting in. Afghan drivers have been taking food in and reporting on where it is safe to go and on whether the warehouses are working. When warehouses were looted, the World Food Programme took the food directly to local communities to distribute.
	The system has held up; that is a phenomenal achievement, but we must all keep that going as we build the long-term reconstruction. In some areas there is still conflict, and there has been criminality, with food supplies being stolen. In some remote communities, there are some very hungry children. I am not saying that everything is perfect, but the catastrophe that, without the conflict, might well have occurred has been avoided. The UN is to be praised, but there is an awful lot to do to make sure that we build on what has been done.

Glenda Jackson: May I add my congratulations to those of my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) on the remarkable part played by my right hon. Friend and her officials at the conference in Japan? I thank her for her warm commitment to women's rights and to ensuring that the women's Ministry has rather more facilities than clearly it has at the moment. Although, as she has made clear, a great number of Afghan experts have had to flee the country, will she confirm that there are still people in Afghanistan who can make a contribution, most particularly in health care and education? Is it part of the UN's programmes in these areas as far as possible to incorporate that home-grown ability, particularly in employing women in these areas?

Clare Short: I am grateful to my hon. Friend. It was not just me in Tokyo who was committed to women's rights, as one might have expected. That commitment was felt very strongly across the board at the conference by all sorts of Governments and by the Interim Administration. That does not mean that the work will be done without more pushing, but the commitment was very strong, which is a good thing.
	Afghans have kept the whole humanitarian effort going in the most difficult situation. After 11 September, when all the international staff were withdrawn and the Taliban said that even using the telephone to keep in touch with the humanitarian agencies could result in a life sentence, Afghans kept things going. It would be intolerable—we have seen this in other states—for all the international staff to come in, with their Land Rovers, their UN equipment, their housing and their high salaries, while the locals are marginalised. We have seen that before, time and again. We must avoid that in Afghanistan and we must build on the local staff, who have performed heroically. They will reconstruct their country, and they must not be marginalised.

Julian Lewis: Does the Secretary of State appreciate that those of us who have consistently supported intervention—whether in Kosovo, Sierra Leone or, more recently, in Afghanistan—are always confronted by a particular argument, which is that when the fighting is over, our forces will be turned into permanent policemen? In view of her answer earlier to her hon. Friend the Member for Cynon Valley (Ann Clwyd), about the need to have more forces in all parts of Afghanistan to maintain security, what contact is she having with her counterparts in other European countries to see if they can help in that policing, given that most of them contribute a lot less to the fighting than the United Kingdom has had to?

Clare Short: I agree with the hon. Gentleman that it has been honourable and essential for us to intervene in Kosovo, Sierra Leone and Afghanistan. There are other failed states in the world that are causing enormous suffering to their peoples and endangering the future security of the world. They include the Democratic Republic of the Congo, Angola, Sudan and, although it is much smaller, Somalia. It is part of our task in the 21st century to have the capacity to bring these conflicts to an end and to build effective modern states that will deliver order to their people and co-operation with the international community. We must, therefore, be able to engage and disengage with them, and to show that this is a sensible process.
	In Sierra Leone, our forces are fewer in number but they have been engaged in building a new Sierra Leone army that is disciplined and properly responsible to the political authority there. The training team has now become an international training team. Something very similar has to happen in Afghanistan. The United Kingdom will hand over the lead of the international force to another country—Turkey is being talked about, and Germany might also take over the lead in the future. The question of whether countries will be willing to commit more forces so that the international force can maintain a presence in all the major cities has not been resolved, and will be an urgent matter for international discussion.
	As in Sierra Leone, we must start the training of the Afghan army and the Afghan police force. The Germans are taking the lead on police retraining; we have taken the lead on a scoping study. The way out—the exit strategy—is to build the Afghan army and police force, and we must get on with that immediately.

Neil Gerrard: I welcome what my right hon. Friend had to say about the register of skills, and about other steps that are being taken to help refugees to return. People should not, however, be forced to return, given that the situation in Afghanistan is still fragile and that there is not yet security across the whole country. Will my right hon. Friend take the time to draw that to the attention of her colleagues in the Home Office, who seem to be considering returning asylum seekers to Afghanistan?

Clare Short: I would be happy to ask my officials to draw my remarks to the attention of the Home Office. We are talking about a lot of different people in this context. The most needy are probably the millions of poor people living in very poor conditions in camps in Iran and Pakistan, who will want to go home if things get better and who will need help to do so. They should not, however, be forced to go home before the appropriate conditions are in place to receive them. Other Afghan people are spread across the world. There are a number of them in my constituency, some of whom have been given full refugee status—as my hon. Friend knows, that means that they will make their own choices—and some of whom are still asylum seekers. We shall all have to make sure that their interests are properly protected.

David Tredinnick: The right hon. Lady has given an impressive account of co-operation and conciliation in Afghanistan. What lessons learned there can now be applied to the middle east peace process? Does she agree that the failure of that process threatens not only the peace process in Afghanistan but the stability of the Arab nations in the area? She spoke about the pivotal role of the United Nations; does she recall that there are United Nations resolutions relating to Israel and Palestine that have not been implemented? Should there not now be just as strong a focus on Israel and Palestine as on Afghanistan?

Clare Short: I agree with the hon. Gentleman. The Prime Minister made that clear during some of his early travels, trying to consolidate the coalition so that the world would hold together to deal with the al-Qaeda problem in Afghanistan. The problem in the middle east is the cause of a great deal of suffering and death. The road that it is on, with both sides inflicting and suffering terrible injury, represents a tragedy that only deepens the bitterness and that must, in the end, be turned around. Both sides must find peace for all those people to have a future. It is a desperate situation, and we all need to work together to make things better.
	I agree with the hon. Gentleman that this is the biggest cause of anger and bitterness in the Arab and Muslim world. We must all commit ourselves to redoubling our efforts to turn the tragedy around and to give young Palestinians and Israelis the chance of a peaceful, better future.

Piara S Khabra: Will the Secretary of State tell the House how many women have been nominated to the Administration that has been set up in Afghanistan? Will she also tell us what will be the role of women in the Loya Jirgah, which is a very traditional institution that is 100 per cent. male dominated? The Loya Jirgah will play an important role in the setting up of a democratic Government in Afghanistan.

Clare Short: I cannot remember the exact number of women Ministers in the Interim Administration.

Hilary Benn: Two.

Clare Short: I met one of them, the Health Minister, in Tokyo. She is a surgeon, a professor and a general. She is quite a powerful woman; I saluted her, literally. I do not think that anyone would take her lightly.
	As I understand it, Ambassador Brahimi is about to make an announcement about the make-up of the commission that will prepare the Loya Jirgah. Each of those bodies is widening the ethnic representation and making it more proportional, to get some legitimacy into the new institutions. The announcement has not been made yet, but it is imminent; I know that there will be some women on the commission, but I cannot give my hon. Friend a number today. I very much agree with him that the next step will be to make sure that women are properly represented in the Loya Jirgah—the big informal consultation across the country that will agree on the transitional Government. My hon. Friend makes his point well, and it is important; there has been some progress, but we need more.

Norman Lamb: I welcome the emphasis that the Secretary of State put on the need to eliminate poppy production. Can she give more details of how it can be eliminated in practice, and of how we can create a mechanism to incentivise farmers to go into food production, and also create a market so that they can get a price for the food that they produce? How concerned is she that there may be Northern Alliance leaders who are still involved in the drugs trade? Could that not undermine the effort to eliminate poppy production in Afghanistan?

Clare Short: I do not know any particulars about those who have made lots of money out of the drugs trade, but I am certain that they are still out there, and that they would wish to continue their activities. Of course, well governed states are the enemy of drug dealers who want to make vast sums of money, because to do that they need disorder and corruption. I am sure that those people are out there, and we must ensure that the space that they have to operate in is destroyed.
	I want to be completely honest in answering the hon. Gentleman's question: there is not a firm strategy in place to deal with the poppy crop that has recently been planted and is still in the ground in Afghanistan. I promise him that we will engage both the Foreign Office and my Department in trying to ensure that such a strategy is in place.
	There have been proposals to buy up the crop as soon as it is harvested, but that tends to be a disastrous strategy, because if we buy up a crop in a very poor country, what will the people with neighbouring fields think about growing next season? There is an urgent need to root out the crop so that it is not harvested—but then we have to offer people the chance of a better future.
	The lesson of the anti-poppy work throughout the world is that bombing and destroying crops and then offering people seeds for another crop, but not a better, legitimate life, is not enough. We need to offer people the package. People do not want to grow drugs and be marginalised, and come under attack from their own army and police force, either in Latin America or in Afghanistan. If people can have legitimate crops and get themselves an income, put their children in school, and have health care and a vote in the governance of their country, they will all choose that—and we must put in place a package that makes them want to choose that. The need is extremely urgent, but that package is not in place yet.

Stephen McCabe: I warmly welcome my right hon. Friend's contribution, and her statement today. In the context of the prospects for peace and reconstruction work, how concerned is she about the weekend news reports that intelligence agents and military officials from Iran are operating, especially in the Herat area, with a view to undermining Chairman Karzai and the prospects for central Government authority?

Clare Short: I met the Iranian Foreign Minister in Tokyo. The situation in Afghanistan has caused enormous destabilisation in Iran, with very large numbers of refugees and a drugs problem that has spread to Iranian young people, because of all that traffic. The Iranian Government are therefore very supportive of the Bonn agreement, and anxious that the process should be successful. They have made a big pledge of financial commitment to the reconstruction effort, and are highly engaged.
	There are strong relationships between Herat and Iran. The people are related ethnically, by language and by the tradition within Islam, so that is natural. There have been suggestions that there may have been some unhelpful activity, but that is denied. I believe that the Iranian Government want to make a success of the process, and we need to work with them to ensure that it is a success.

Andrew Robathan: May I join in the almost universal and, in my case, heartfelt and genuine welcome for the Secretary of State's commitment to the reconstruction of Afghanistan? What mention was made of democracy in Tokyo? We hear about the Loya Jirgah and the commission. Does she believe that there is an appetite among the people who will make up the Loya Jirgah for proper, democratic and legitimate representation? Of course it is difficult, but there is no reason why the ordinary person in the street, however ill educated, male or female, should not be allowed to express their views on how they are governed.

Clare Short: I completely agree with the hon. Gentleman. That is the underpinning objective of the Bonn process, but it is a question of getting from here to there. We do not have the time or the organisation to have instant elections that would be representative across the country. The Interim Authority is slightly representative, although not perfect, but it is what Ambassador Brahimi could do to get agreement out of Bonn. The commission will be more representative of all the various groups in Afghanistan, and then the Loya Jirgah will have discussions with the elders and leaders of the whole country. A full Interim Administration will follow, and then elections.
	We need a process of widening legitimacy and inclusivity, while taking enough time to have proper, legitimate elections, which require a census and electoral registration. What I have described is the intention of the Bonn agreement. Provided that we reinforce the Interim Authority and the people of Afghanistan see the process delivering for them, we will end up with a legitimate, functioning, democratic, representative Afghan Government.

Hugh Robertson: I add my welcome to the Secretary of State's statement. The right hon. Lady mentioned internal security concerns in Afghanistan. Is she in favour of broadening the remit of the troops already there to safeguard the delivery of humanitarian aid and, critically, to ensure that the aid that is there gets to the people who need it as soon as possible?

Clare Short: The remit of the forces in Afghanistan is determined by Security Council resolutions. There has to be consensus across the international community to move these matters forward. I would not like to elaborate on any modification of the Security Council remit in specific terms. The big question is whether the international force will deploy to other cities in Afghanistan and whether the will and resources are available for it to do so.
	My view on the military engaging in humanitarian efforts is that the military should do what the military can do and humanitarians should do what humanitarians can do. We should not muddle the two, but they can often be complementary. The most important thing is to bring order and then humanitarians can operate. Part of bringing order is to get the trust of the local community, and UK troops tend to be very good at that, partly because of the lessons learned, painfully, in Northern Ireland.
	My Department provides funding for small projects that the troops tend to carry out with local communities, such as fixing up schools and arranging games of football with the children. That increases the troops' authority and legitimacy and provides a sense of well-being. That is the best way to organise these matters, and UK troops are the best in the world at that kind of peacekeeping and working with local communities.

Orders of the Day
	 — 
	Civil Defence (Grant) Bill

As amended in the Standing Committee, considered

New Clause 1
	 — 
	Report on civil defence review

'Before 1st April 2002, the Secretary of State shall lay before both Houses of Parliament a report specifying the implications of the Government's civil defence review for the operation of this Act.'.—[Mr. Beith.]
	Brought up, and read the First time.

Alan Beith: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss amendment No. 1, in clause 2, page 2, line 24, leave out "2003" and insert "2004".

Alan Beith: The significance of the date proposed in the new clause is that that is the beginning of the first financial year to which the Bill applies—namely, the coming financial year. Amendment No. 1 returns to an issue of great concern in Committee—that is, whether the Bill could be delayed for a year while we absorb the lessons and conclusions of the Government's civil defence review.
	People outside this place, as well as local authorities, will be surprised to learn that the Bill is not a product of 11 September or of the Real IRA threat, but of the court challenge mounted by the Merseyside fire and civil defence authority that demonstrated the complete legal confusion about the basis on which civil defence moneys are allocated. The authority challenged the whole funding basis.
	However, the matter is hardly urgent—unlike some of the issues raised by 11 September. The Bill has been around since last June. Despite all that has happened since then, and despite the fact that the Government have set up—rightly—a major review and consultation process on civil defence and emergency planning, they have plodded on with the measure.
	The new clause is sensible and would ensure that the civil defence funding system was designed to fit whatever emerges from the review. It would fit the future pattern of civil emergency planning, which will soon be decided. As long ago as 28 November, the Parliamentary Secretary, Cabinet Office said of the review that
	"a clear consensus is emerging".—[Official Report, 28 November 2001; Vol. 375, c. 1016.]
	That was some months ago, but the speed of the Bill's progress does not offer an entirely reliable guide as to how soon we might receive a statement from the Government on their proposals.
	The consensus was supposed to be emerging on the issues raised in the consultation document that the Government published last August. Since then, several things have happened that might influence the review and the necessary funding arrangements. There were the dreadful events of 11 September, which caused everyone in Britain suddenly to start thinking about civil defence. It is at least partly true—although it may be unkind—to concede that civil defence has a low priority for many people. They see it as something of a joke—as some sort of "Dad's Army"—despite the fact that individuals in local authorities are working hard to maintain a proper emergency planning system and sometimes have difficulty in convincing even their local government colleagues of the importance of that work. No one can ever really know which contingency will require the operation of emergency planning.

Andrew Miller: I agree with the right hon. Gentleman that civil defence emergency planning has not been at the forefront of people's minds. It has been difficult for those of us who represent high-risk constituencies to raise the profile of such planning in this place. Why is he arguing for delay in respect of these powers, which clearly stem from a court decision? Would not delay mean a vacuum?

Alan Beith: The hon. Gentleman must wait a little so that I can develop my argument. I know his constituency area well and I entirely sympathise with him; there is considerable danger of attack on installations in that area and that is why he takes a close interest in the matter. Indeed, I shall refer later to a question that he put recently on the subject.
	The measure seems to be putting the cart before the horse, however. If substantial new arrangements for emergency planning are to be devised, we need a funding system that will fit them. Civil defence has not been abandoned since the Merseyside court decision, when an out-of-court settlement brought the matter to an end. The Government have not stopped signing cheques for civil defence, although they have become rather worried at the size of the amount on some of the cheques. That is partly because local authorities realised that recent events required them to initiate more extensive emergency planning work and rightly expected a reasonable contribution from the Government. We are not talking about front-line funding for the fire brigade or the police force, but funding for people back in the council offices. They are not thought about much, but they have to work out contingency arrangements so that the fire brigade and the police force can be deployed with the necessary support from other services. Those things do not happen by accident or by magic; they require planning.
	If the Merseyside settlement had brought all that to an end, we should have been dealing with emergency legislation by the next week. The Government have found a way to proceed, and they should continue on that course for a little longer in order to get the arrangements right. That is the basis of my argument.

David Wilshire: As someone whose constituency is very close to Heathrow airport, I would argue that it is better to take time, as the right hon. Gentleman suggests. The status quo will continue while the review is being carried out. Does he agree that the effect of the Bill might be to reduce the amount of money available, so the status quo is better than a reduction? 4.30 pm

Alan Beith: Yes, indeed. That is a perfectly reasonable argument. I shall shortly address the question of whether less money will be available as a result of the Bill, but I return to the basis of my argument for the new clause—at the very least we need to know the implications of the Government's review for the Bill, and it would be better if those new arrangements could be put in place before fitting the funding around them. I was reviewing what has happened during this process.
	Let us remember that all this started long before 11 September, and one of the effects of the events of 11 September, as I was saying, was to put in everyone's mind a sense that these are important matters and that they should perhaps be given more time and greater priority than they have been given hitherto. Hon. Members and people in the country started to ask questions about the preparedness of our civil emergency services.
	Other events had a similar effect, although they were of a different kind. There was discussion in Committee about flooding and flood emergencies, about which the hon. Member for Mid–Worcestershire (Mr. Luff) has a particular interest, as do others along the Severn, for example. Their great concern is that the civil emergency planning machinery is brought into play to marshal forces to deal with floods.
	In many constituencies, including mine, the foot and mouth crisis vividly brought home the dangers of not having sufficient emergency planning in place. During the foot and mouth emergency, we saw deficiencies and difficulties of all kinds. Many local authority staff found themselves quickly transferred to emergency work for which they had no previous experience. Local authority trading standards departments became the animal movement licensing offices for the system set up for foot and mouth disease, so they probably had to abandon much of their normal trading standards work to deal with unfamiliar work, and some of them worked valiantly.
	Even officers from the Inland Revenue were brought in, to help staff round-the-clock operations at emergency control centres. Again, they did unfamiliar work, much of which was not planned. In the north-east of England, which I represent, we did not have our own emergency control centre; we had to rely on that at Carlisle, where resources were already concentrated. Everyone acknowledged that that was a disaster and a wholly unsatisfactory way to deal with the crisis in the north-east of England. No plans were in place to set up an emergency centre in Newcastle, although one was eventually set up with considerable difficulty. That helped to show the need for more emergency planning for the sort of administrative arrangements that need to be created in various kinds of emergency.

Mark Field: I appreciate what the right hon. Gentleman says about foot and mouth disease. Clearly, that was a major disaster, particularly in Northumberland, in Cumbria and in the constituency that he represents. However, on the basis that such emergencies occur, we hope, only once in a lifetime—indeed, the previous occurrence took place 34 years ago—what training realistically could be undertaken by local authorities to ensure that staff would not be inevitably transferred from trading standards or other sub-departments to deal with that specific problem, rather than a general emergency issue?

Alan Beith: We in Northumberland may take some wry amusement from the suggestion that foot and mouth has broken out once in lifetime; it has broken out twice in a lifetime for us. It happened in 1967, when a lot of lessons were not learned, and we want them to be learned this time.
	Clearly, every local government officer cannot be trained for every role that he or she might have to take up in an emergency, because the training depends very much on the character of the emergency. A major chemical explosion affecting a large area would give rise to different needs from those involved in closing roads and footpaths in the foot and mouth crisis, or closing off areas because of a terrorist attack. They all give rise to different problems, but devising a mechanism by which people can be put into different posts and trained rapidly is the sort of thing in which emergency planners have to engage, and they do so regularly.
	The local authorities with which I am familiar have certainly run emergency planning exercises and conferences for many years, but the reaction to the events of 11 September, and the experience of floods and especially foot and mouth disease, made them all feel that they needed to gear up their arrangements and to have more standard procedures ready, all of which require preparation. Each new wave of staff entering post needs to be familiarised with those arrangements; they cannot be put in place simply. People cannot say, "If we need them, we will go and get them," as they did with the green goddesses for the fire brigade. They must be sure that the new generation of staff are familiar with what they might have to do and with what sort of arrangements have to be made.
	All sorts of difficulties were revealed by the incidence of foot and mouth. For example, sites for the mass burial of carcases were rapidly identified with no proper arrangements for consulting the local community being made. All sorts of problems resulted from that, but local authorities, at least, have learned some lessons. Northumberland has held a county council inquiry to try to fill the gap left by the Government's failure to hold a public inquiry and that useful exercise has brought to the surface some of the lessons to be learned about features of emergency planning. Such experiences have structural implications for the composition of emergency planning teams. The teams may require more permanent emergency planning staff or more staff whose designated duties include emergency planning.

Andrew Miller: The right hon. Gentleman referred to public consultation. Although in some respects I accept his remarks, does he not accept that post-11 September, some of the issues relating to the emergency planning that identifies specified sites are best dealt with outside the public domain?

Alan Beith: That is most certainly the case. If I had not known already, my experience on the Intelligence and Security Committee would have provided me with many reasons to be aware of that point. It means that local authorities must have staff who are experienced and can be trusted with relevant information that cannot be placed in the public domain. All that requires care, and to do something on an absolutely secure basis often takes a little longer and requires a little more effort and organisation than if it were carried out on a more general basis.
	The Bill's original purpose was to allow for a return to a previous level of funding. That was the way that some of us, including my colleagues and those Conservative Members who served on the Committee, saw it. The idea was not dreamed up out of our imaginations, but clearly resulted from the statement of the Home Office Minister who was in charge of the Bill when it was published last June. He said:
	"This short, technical Bill would enable us to return to the funding levels for the Civil Defence Grant."
	That created a feeling of concern among emergency planning officers, because that would have involved reducing this year's expenditure of about £18.5 million to the £14 million of the previous year.
	The hon. Member for Ellesmere Port and Neston (Mr. Miller) has done us a service—admittedly, a planted service, but none the less valuable—in asking a question that extracted from the Government an indication that, for the coming financial year, they do not propose after all to make the cut that was presaged when the Bill was published, but keep expenditure at roughly its present level.
	However, the answer was intriguing in that it left doubt as to whether there would be a formula for the figure, and that provides another argument in favour of my new clause and amendment. If the Government cannot decide whether to use the formula that they are creating under the Bill or to continue as they are at present by informal consultation with local authorities, what is the panic and rush? Let us do the job properly by considering the results of the civil defence review.
	Having made the decision that resources will not be cut and will remain at about £18.5 million, the possibility emerges that the Government will say, "Will someone please give us a formula that will enable us to distribute this money in the same proportion as it is distributed now?" I do not know how they will do that, so they had better consult the people who were in what was the Department of the Environment who worked out the standard spending assessment. However, that is an entirely facetious suggestion, because I would not let the authors of the SSA loose on any other aspect of government if I could possibly help it.
	This case conjures up the sort of mathematical poser in which one says, "This is the answer, now give us the question." If £18.5 million is the answer, will it be distributed in the way that negotiation and discussion between authorities and the Cabinet Office have determined so far or will a formula be introduced so that the same sum of money is distributed to authorities according to new and no doubt excellent principles that would undoubtedly result in less being available to some authorities and more being available to others?

Tim Collins: Does the right hon. Gentleman agree that there is something to commend in the findings of the Emergency Planning Society, which has asked the Government to commission an independent inquiry into the appropriate level of costs for the services?

Alan Beith: We would all feel much more comfortable about such an important matter if we knew that the total amount had been independently determined by another voice. That is not necessarily the only way to achieve an outcome, but I would not complain if the Government chose to take that course. The new clause and the amendment in particular would enable the Government to do that. It would give them a bit more time to maintain the present arrangements, which is, after all, what they have really said that they will do.
	I have conjured up the possibility that they might redistribute the £18.6 million according to a new formula, but I suspect that they will simply freeze individual local authority grants at this year's levels. To do anything else would be to invite difficulty, and I shall be interested to hear from the Minister on that. If the Government freeze funding, there is no reason why they should not establish a better mechanism to decide the amount. Again, however, that should be in the light of the civil defence review.

David Wilshire: I hope that the right hon. Gentleman will take my criticism of him in the spirit in which I mean it, but he was nothing like rude enough about the SSA approach to spreading money around the country. Does he agree that it is daft to apply that approach to this case, because it implies that the money will be spread around all authorities? My experience of flooding and other disasters is that they do not spread themselves across every county council and borough in the land. Instead, they are focused in an area. Although that area needs a lot of money, others do not need any.

Alan Beith: I am not sure that I entirely agree with the line of the hon. Gentleman's argument, although I agree that no criticism is sufficient for the SSA mechanism. I merely did not want to stray too far from what is appropriate in the debate. Were the money to be distributed according to that formula, the impact on Northumberland and Somerset, to give just two examples, would be appalling if we consider the disparities in education spending between those authorities and the national average, all helpfully set out in another parliamentary answer last week that reveals the true horror of the SSA.
	Areas that face a particular threat will have special emergency planning needs. The hon. Member for Ellesmere Port and Neston referred to that and it is also relevant to the concerns of the hon. Member for Spelthorne (Mr. Wilshire) about Heathrow. In general, however, planning, unlike front-line facilities, such as the police and the fire brigade, needs to take place in every local authority. Any local authority might have to cope with the impact of an emergency. For example, an obscure local authority that never thought that it would face an emergency could find itself coping with a major rail crash caused by a terrorist attack on the railway system, just as police forces that were not geared up for anything so dramatic as terrorism are having to get help from elsewhere to conduct inquiries in their area into a group of terrorists that has disappeared into it. The ability to plan and to obtain help exists in all authorities.
	There is no point devising a formula unless we know what it is. As there is little likelihood that the Government will devise one for the financial year 2002-03, what is the urgency of passing the Bill in its present form? If the new clause were included in it or accepted in principle by the Minister, which would not be difficult to do, Parliament and local authorities would at the very least have before them an indication of the implications of the defence review for the funding of emergency planning. Local authorities will have an idea of that when the magical consensus is set out. However, what constitutes that consensus will probably be determined by the Government. Local authorities and emergency planning officers will have to work within that, but they need to know the implications for their funding.
	Better still, the amendment, on which we might vote later in our proceedings if we do not get satisfactory answers, would confer the year's delay that so many hon. Members in Committee thought would be a good way to deal with the problem. It would enable us to absorb the full implications of the defence review and to mould a funding formula that arises properly from that. It might be that we can mould a different mechanism—after all, the Government may learn something from the consultation in which they have engaged in the past year.
	That process was described in Committee, in less than flattering terms, as "somebody from the Department getting on the phone to the local authority and arguing over the figures." Nevertheless, the Government may learn from the process that there is an alternative to a formula that imports none of the horrors of the SSA and enables the Government to take account of circumstances in individual areas. Whatever seems appropriate, the result could be much better determined with a year's delay. At the very least, we need to know the implications of the civil defence review before we embark on this financial year.
	This is important work. It has been an unglamorous part of work in local authorities and central Government for the happy reason that for several years we did not have to cope with many major civil, military or terrorism-related emergencies. In recent years, we have had to cope with increasing numbers of terrorist emergencies, as well as significant civil emergencies. That has all demonstrated the need to reconsider the way in which we deal with such matters.
	The Government have recognised that and have acted by initiating a consultation process. Their action on funding should be part of that, not a rushed attempt to cobble something together simply because the old funding system could no longer be sustained on legal grounds. The world has not come to an end, and emergency planning has not stopped, as a result of that legal settlement. We could continue on the present basis for another year and, in the meantime, absorb the results of these important discussions.

Andrew Miller: I appreciate the tone in which the right hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke to the new clause. I followed his arguments in part, but I disagree with his conclusion.
	Paragraph 4 of the Bill's explanatory notes says:
	"A Review into . . . emergency planning is under way, the result of which is likely to be emergency planning legislation."
	The right hon. Gentleman seeks to pre-empt that review and force out several of its results, whether or not it is ready, by 1 April. He made the point that there are continual changes in the nature of potential civil emergencies. On the threat from terrorists, it is acknowledged that the entire world changed after 11 September.

Mark Field: There is little doubt that, since 11 September, many parts of the country have been on a heightened alert. However, many local authorities, particularly those in central London such as the City of London and the city of Westminster, which I represent, have been able to cope relatively well and with relatively little upheaval for much of the residential and large tourist populations because the world did not change to such a great extent. Over the past 30 years, people have become accustomed, particularly in mainland Britain, to confronting the terrorist threat. Important as these provisions are, we should not operate on the pretext that the world has changed for ever.

Andrew Miller: I shall not get drawn too far into that discussion, Madam Deputy Speaker, or you will rule me out of order, but I have to disagree with the hon. Gentleman. The nature of warfare has changed since 11 September, and I suspect that the Intelligence and Security Committee, on which the right hon. Member for Berwick–upon–Tweed sits, has been discussing that in great detail.
	Our constituents are affected by many circumstances other than that change. The right hon. Gentleman spoke about the effects of foot and mouth disease in his constituency. I respect those observations because, fortunately, my constituency—indeed, the whole of north Cheshire—escaped the ravages of that terrible disease. I also respect his observations about flooding: although in the past 12 months we have had a few localised incidents in which many residents faced severe problems, they were nothing compared with the floods in Worcester and elsewhere. However, a recent series of incidents centred on chemicals sites in and around my constituency illustrates the need for continuous review of the nature of the planning process in each area of risk.
	The nature of the risk changes constantly. In my constituency, that change is due in part to the actions of businesses in changing their product mix. Huge advances in chemicals safety have been made in the past 20 years, but even though the risk has become more remote, one must always pose the series of questions that start, "What happens if?" Another factor that comes into play is the increase in air traffic in the north-west.
	Last year, two incidents occurred that might well have sparked the need to put emergency services on full alert—indeed, they were partially mobilised. The first resulted from the actions of fuel protesters who blocked the entrances to one of Britain's major hazard sites, with the result that the fire authorities could not gain access. Emergency planners started to consider the options. Some months later, animal rights protesters playing the same game tried to blockade Ellesmere Port's Stanlow refinery.
	Opposition Members might have found some weak excuses to support the fuel protesters, but I suspect that they would not have supported the animal rights protesters. The Opposition cannot have it both ways—both incidents caused the same sort of emergency.

Tim Collins: Given his earlier remarks about petrochemical plants in Cheshire, the hon. Gentleman will not be surprised to hear that when my office contacted the Cheshire county emergency planning officer to ask his views on the Bill, he raised precisely those points. Does he, as a Cheshire Member, agree with that officer that the grant mechanism that the Government should draw up should take into account the different degrees of threat affecting local authorities, and should not simply be per capita or based on acreage?

Andrew Miller: If I can do so without stepping outside the context of the Bill, I will deal in some detail with that argument because there are some important points to be made.
	As the right hon. Member for Berwick-upon-Tweed said, we are shifting from an arcane formula that was subject to challenge—one that I understand resulted in an out-of-court settlement—and now we need stability pending the implementation of a new system. That new system must emerge not from the Bill—it would be unreasonable to expect that of the Government—but from the emergency planning review itself. I support the concept of the Bill as a means by which to deal with the here and now, not the long-term future.
	The long-term future needs to take into account all the outcomes of the review. I hope that my hon. Friend the Minister will give an assurance that the review will include consideration of the ways in which public resources can be used more effectively cross- departmentally so that we do not have the sort of nonsense that is set out in a letter from the Civil Aviation Authority, which tells me that it is all right for aeroplanes to circle the Stanlow refinery in a holding pattern because that is a convenient area in which to hold them. Holding them out on Liverpool bay would be considerably safer. I see the hon. Member for Taunton (Mr. Flook) laughing. I think that he agrees with my observation. We need that sort of joined-up thinking from the Cabinet Office after the review. Heads must also be knocked together to some extent.

Julian Lewis: I appreciate the hon. Gentleman's point that if a long-term review is about to come out, it is sensible to get all our ducks in a row, as it were. But what has he to say about the fact that the Ministry of Defence, in the short to medium term, is producing an extra chapter for the strategic defence review arising out of the events of 11 September? That will come through quite quickly. Is not the proposal of the right hon. Member for Berwick-upon-Tweed (Mr. Beith) sensible, given that the conclusions of the MOD study will become available in the extra year, even if we have to wait longer for the final results of the long-term review?

Andrew Miller: I am glad that there is some recognition among Opposition Members that my earlier point was correct, and that the events of 11 September changed things.
	Many of the risks are real, as is shown by the incidents that have occurred: foot and mouth, floods, the serious explosion at Associated Oxtel, a leak from GATTX, and the actions of fuel protesters and animal rights activists. These are real issues that affect my constituents.
	A new dimension will have to be considered. I suspect that part of it will have to be dealt with by the Committee that is chaired by the right hon. Member for Berwick- upon-Tweed with a high degree of confidentiality. As I have said, I am dealing with the here and now.

Richard Younger-Ross: The hon. Gentleman refers to the here and now, and we all understand that. I accept that there have been changes since 11 September. However, reviews are taking place that take into account responses since that date.
	Are we not putting the cart before the horse? I take the hon. Gentleman back to what was said in Committee. My hon. Friend the Member for Winchester (Mr. Oaten) asked:
	"As part of the wider review, is it possible that the new system that will be implemented by the Bill will be abolished and reviewed again?"—[Official Report, Standing Committee E, 11 December 2001; c. 23-24.]
	The Minister replied, "That is possible". Is not what we are now doing a waste of time and money, if in a year's time we may find ourselves considering these matters all over again?

Andrew Miller: I think—I believe that the right hon. Member for Berwick–upon–Tweed agreed with the observation—that we do not spend enough time considering potential civil emergencies. Even if the Bill has a short life, I consider that it is necessary in the context of the here and now. It would be far better to get the issue out of the way by focusing the attention of the entire House, including Members with military expertise and those with expertise in agriculture or river systems, for example, on it. The same goes for industrial experts who can deal with potential chemical risks. We must work together to try to find a consensus on the right way forward.

Adrian Flook: Would not capping the amount of money that goes to civil defence, as the Government propose, make it more difficult to decide how much money there should be for, say, safeguarding installations?

Andrew Miller: I told the hon. Member for Westmorland and Lonsdale (Mr. Collins) that I would come to that and its relationship to the standard spending assessment. Before doing so, I shall conclude my point about why we need to introduce the Bill, then consider how to join up facilities better.
	I shall give a simple example. The Highways Agency needs to engage in such debates. A few years ago, in the constituency of my hon. Friend the Member for Weaver Vale (Mr. Hall), a swing bridge on the A56, which passes over a canal, was scheduled to be repaired. I remind the agency, through my hon. Friend the Minister, that it is still scheduled to be repaired. At the time, a foam tender located at a fire station could not have covered emergencies to the east on the motorway network, so there were discussions about whether it should be moved further from a chemical plant, which would delay its response to emergencies there. Such an absurd situation begs the question why all the agencies do not co-ordinate to ensure that they take the best decisions, not the piecemeal decisions of the past.
	In response to the hon. Members for Westmorland and Lonsdale and for Taunton, the creation of the SSA resulted in a series of rank absurdities. Members who can remember that far back will know that the SSA was introduced at the same time as the unified business rate and coincided with the poll tax, which got all the headlines. Areas such as mine suffered a net loss because of the loss of rates from the chemical industry, and faced serious financial problems. Opposition Members who look carefully at the arguments on the SSA made by counties like Cheshire will acknowledge in hindsight that it was not smart to penalise authorities that had savings or to shift resources without considering the special requirements of some parts of the country.
	I urge my hon. Friend the Minister to find a long-term formula in the review that moves away from the presumption in the SSA. Its replacement, which, we hope, will soon come out of the review, should refund moneys spent on emergency planning to local authorities and be commensurate with the realities on the ground, which vary. The right hon. Member for Berwick-upon-Tweed pointed out that foot and mouth has affected his constituency twice during his time in Parliament. However, equally long-serving Members who represent other parts of the country have not experienced such things. He will never experience in his constituency some of the risks and incidents that have occurred in my constituency. Flexibility must therefore emerge from the review, but we must be wary of making a premature response. Opposition Members would rightly chide my hon. Friend the Minister for the obvious weakness if the Government simply said, "This Bill is the here and now and also the long-term future."
	However, we need to find a mechanism to achieve a stable situation so that a proper debate on shifting to a more rational basis for the formula can take place. I therefore urge the House to reject the new clause and amendment No. 1. I shall not repeat the arguments, but I hope that the House develops a consensus around a more sensible way to proceed well before 2004.
	That begs the question whether there is such a mechanism. The answer, of course, is yes. A review is being undertaken and we are told, without ambiguity, that it is likely to result in emergency planning legislation. It is difficult to assume that any such legislation would not have money implications, so the logic of pushing decisions related to the Bill further into the future does not stand detailed examination.
	Against that background, although I urge the House to reject the new clause and the amendment, I ask the Cabinet Office to listen seriously to my arguments and those made from both sides of the House about the funding mechanism that will emerge from the review. Important issues will affect a significant number of constituencies up and down the country and events can occur as a result of the entirely unforeseen. Despite all the defence expertise of the hon. Member for Cities of London and Westminster (Mr. Field), he could not have foreseen the events of 11 September. Equally, issues surrounding foot and mouth, flooding and human error could not be foreseen and affected areas that, traditionally, were not high risk.
	I hope that the Government provide reassurance that, in considering long-term plans, we shall move from piecemeal operation, with Departments acting in isolation, to a more responsive formula that takes the known risks into account, but provides enough flexibility to allow for the unknowns that are, sadly, with us.
	I hope that the Bill becomes law in approximately this form and that we get it on the statute book as quickly as possible. We must then focus the attention of the whole House, not just the handful of Members here, on the important longer-term issues.

David Wilshire: I shall focus on amendment No. 1 and I hope that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) does not press ahead with the new clause, because that might prevent us from voting on the amendment. I hope that there is a vote, because the amendment is the important measure.
	All the key decisions about the review and the Bill appear to have been taken before 11 September. The hon. Member for Ellesmere Port and Neston (Mr. Miller) expressed surprise that Opposition Members agree with him that 11 September is important. I am pleased that he agreed with us that 11 September was important. The significance of the Bill for me is that it had its origins before 11 September, which was not that long ago. The implications of those events were so enormous that taking until at least 2004 to conduct a review will be the reality, not just what we ought to do.

Jim Knight: Is not there a contradiction in the hon. Gentleman's argument? The implications of 11 September for emergency planning were profound. Some of the assumptions that underpin such planning may have shifted and the threat of terrorism may have upped the ante, so we need to act quickly. It is right to close loopholes and undergo reviews, and we may want to consider other issues in the future, but to argue that we should wait until 2004 when we may want to deal with some profound issues quickly is perhaps contradictory.

David Wilshire: If that were the case, the hon. Gentleman would be right, but I do not accept that there are loopholes. If there are, this measure seems to close only one by ensuring that there cannot be any more money. In fact, there will not be as much.

Tim Collins: My hon. Friend may have noticed that the Government, in their explanatory notes, say:
	"The Government believes the effect of the . . . Bill will be to prevent unexpected increases in costs".
	It is quite clear that that is what the Bill is about.

David Wilshire: My hon. Friend is right. I agree with the hon. Member for South Dorset (Jim Knight) that other issues will need to be addressed, but my argument and that of the Liberal Democrats is that, while we are addressing the issues that the hon. Gentleman is concerned about, we should maintain the status quo. As my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) said, as a result of the Bill we will have the money we need—rather than less money—while we examine the loopholes.
	The then Home Office Minister, the hon. Member for North Warwickshire (Mr. O'Brien), told a conference in 2000 that in the Government's judgment £14 million was enough. That was a long time before 11 September. If £14 million was adequate then, it patently is not adequate now. The Bill will drive us back to the standard spending assessment approach. The right hon. Member for Berwick-upon-Tweed made it clear that that approach was wrong, but it is the only approach that we will have for the moment. If we go back to the old way of doing things while the review takes place, we will adopt an SSA approach to a system that even the Government accept must be replaced. They are busily trying to come up with a new way of distributing money. It is self-evident that we should wait until we have a new way of distributing money before we proceed with any measure that will limit the amount that we spend on civil defence.
	The stupidity of the SSA system is notorious, and there are a thousand and one examples of why it should be scrapped as quickly as possible. I can give one such in my county of Surrey. The SSA allocates money to the fire service throughout the country, but it takes no account of the length of motorway in each county. Surrey has a huge chunk of the M25, including sections that have the most accidents, yet no account of that was taken in the allocation to the fire service, which was expected to provide emergency cover for road accidents. If that is the way the SSA works, heaven help us if we go back to applying it to civil emergencies on the scale of the events of 11 September.
	I know that cash is a finite item, and I accept the argument that we should not spend money that we do not have, but one of the realities of civil disasters and emergencies is that they demand large spending immediately. We should not take a cash-limiting approach and say, "This is how much we have got, so if, God forbid, a vast number of people are killed we can clear up only so much and not the rest because we will have run out of money." I do not believe that such an approach would commend itself to the British people, let alone to the House of Commons.

Jim Knight: Perhaps the hon. Gentleman could help me. I agree with his comments on the SSA. The Dorset SSA is appalling, and I am sure that we would all argue that our own SSAs do not work because the system is a bit of a joke. However, nowhere in the Bill does it say that the Government cannot increase funding. It just says that the Government should
	"determine the aggregate amount of grants to be made".
	That does not restrict the Government, but the important point is that it does not deliver a blank cheque to local government and everyone else. We need to close the loophole that currently allows a blank cheque to be written. The hon. Gentleman, who may have memories of being in government himself, will surely accept that that is dangerous.

David Wilshire: I accept the principle that it is necessary to be very careful with blank cheques. My hon. Friend the Member for Westmorland and Lonsdale will deal with instances in which money will be cut. I can only say, on the basis of my experience of local government—for instance, on a fire brigade committee—that there may sometimes be an argument for, as it were, a limited blank cheque. From the moment that a disaster occurs, we cannot afford to sit down and say "We will respond, within the limit made available by the Government." That is not the way in which disasters should be handled, but if I understand the Bill correctly, it will force us into such a position, at least until the Government have completed their review of SSAs.

Andrew Miller: With respect, I think that the hon. Gentleman has misunderstood the Bill. It is about the planning process. No one is saying—no Labour Member has ever argued, and the hon. Gentleman's party never argued when in government—that local authorities faced with serious emergencies such as those that he cites should not respond adequately to meet public needs at any given time.

David Wilshire: I hear what the hon. Gentleman says. Perhaps the Minister will tell us that the Home Office view—expressed in 2000—that £14 million was enough has now been scrapped. Perhaps he will tell us, in that case, how much more will be provided. Until I hear how much more will be made available following 11 September, however, I will take it that £14 million is all that is available, and that is not adequate.

Andrew Miller: I refer the hon. Gentleman to what the right hon. Member for Berwick-upon-Tweed (Mr. Beith) said about a written answer that I was given last week.

David Wilshire: I look forward to reading what was said.

Tim Collins: My hon. Friend will doubtless agree that Labour Members are making an extremely powerful case for amendment No. 2, which proposes that only increases can constitute in-year alterations to legislation. We look forward to their support in the event of a vote.

David Wilshire: My hon. Friend has a great deal more courage than me. Although I was aware of amendment No. 2, after 14 years I have learned that those who stray on to an amendment that is not in the group under discussion are rapidly told off. I may say something about amendment No. 2 later.
	A review is being conducted, and is not yet complete. The civil contingencies committee, heaven help us, has set up 10 working groups. I gather that a while ago it had managed to examine 300 plans, with plenty more to go.
	I think that I understand the way in which the official mind works, and the way in which the official machinery grinds away. Ten working groups will probably take until at least 2004 to finish their work. If such groups are set up to review all these issues, it is only sensible to let them finish before changing legislation.
	Another factor that is causing confusion, which provides yet another reason for delay and for supporting amendment No. 1, is the transfer of Government responsibilities from the Home Office to the Cabinet Office. What little evidence I have been able to find suggests that that is causing difficulties. I mean no criticism, but when a complicated issue is being transferred between Departments, it seems eminently sensible to let that be completed, and to allow time for the whole process to be researched and bedded down, before legislating.
	Let me give an example of the current difficulties. In my constituency, one upshot of 11 September was that Heathrow airport suddenly found that many people were stuck there because aircraft over the Atlantic had been grounded. Thousands of people had to spend the night at the airport. It was not long before every hotel in the area was full; it was not long before every hotel in the region was full; and it was not long before Heathrow Airport Ltd made a request to Hillingdon borough council, because the terminals are in Hillingdon. Heathrow estimated that at least 2,000 extra beds were needed urgently, over and above what was available; otherwise, it was the park benches or the uncomfortable seats in the terminals at Heathrow.
	The best that Hillingdon could do within its planning arrangements at the time—again, I mean no criticism of Hillingdon—was to find 150 beds. It did the obvious thing: it contacted neighbouring authorities, my own included. That yielded another 150 beds. In the end, a number of my constituents got involved. When there were no more beds to be found and the emergency planning system could not find any more, my constituents and other people's constituents around the airport said, "Come and sleep in my spare bedroom." Ultimately, that was how the crisis was solved.
	Given the fact that the Government are changing Ministries to handle such a situation, and that councils have not had any experience of that scale of disaster, it seems sensible to wait for all the reviews, including the ones that local authorities must carry out, to finish before passing legislation of this sort.

Mark Field: My hon. Friend has given a very good, practical and specific example from the past few months. Does he agree that if this whole process is to be, as it is at the moment, demand rather than needs-led, we need at this juncture to have an entire rethink, which will inevitably take some time? It is particularly important to gain a sense of perspective beyond what has happened just in the past four months and look towards getting some pattern—inevitably, it will be a flexible pattern—into place for the years ahead to ensure that we have the right formula.

David Wilshire: My hon. Friend is right. He may be amazed to discover that the Government agree with him. They set up their 10 working groups to carry out exactly that process. He is right to say that it should be completed before we embark on legislation of this sort.
	As I have said, I am not sure that new clause 1 commends itself to me that much, but I want to support amendment No. 1. I sincerely hope that we will have the chance to do that. I make only one criticism of it; it is in the same spirit as my previous criticism of the right hon. Member for Berwick-upon-Tweed. I consider that 2004 may be too soon and that the date should be later but in the absence of a chance to vote for an even later date I would be happy to support him.

Jim Knight: Like most hon. Members here, I have concerns about emergency planning. I sit on the Select Committee on Defence, which as I am sure the House is aware, is reviewing the defence and security of the United Kingdom and emergency planning. The civil contingencies secretariat is very much part of that review but I support this legislation because it is right to end the blank cheque to local government.
	With all due respect, amendment No. 1 is bizarre. It says in effect that, in 2004, the Government will be able to limit spending by making an assessment but in the meantime the loophole remains and local authorities can spend what they like: we will just have to foot the bill as the Government.

Alan Beith: I think that the hon. Gentleman slightly misunderstands the present situation. He is surely not suggesting that the Government are allowing local authorities to spend whatever they like. In fact they are engaged in regular consultation with local authorities to try to ensure that the funding that they provide is appropriate to an authority's needs.

Jim Knight: Different people have given me different interpretations of the system. I have spoken to some people who are basically saying that currently it is so confused that they can go ahead and spend and Government will have some obligation to reimburse.

Adrian Flook: It is not as simple as that. The first £25,000 is paid for by the local authority, and if that is a shire district that is a substantial amount. Under the Bellwin system, above £25,000, only 80 per cent. is clawed back, so local authorities are responsible for large elements of the money.

Jim Knight: I accept that, but there is a danger that if we leave open the loophole, local authorities—seeing 2004 on the horizon—will have a spending bonanza, buying everything that they need to cope with a threat.

Mark Field: The hon. Gentleman takes a cynical view of local authorities. I suspect that, like me, he has been a member of one and remembers the mad dash in the 11th or 12th month of a year to see which road-widening scheme, for example, is required. I can appreciate that the Government, understandably, take the view that they want to cap expenditure, to an extent, and do not want it to spiral out of control. But does not the hon. Gentleman see that given that the average over the past three or four years has been around £14 million, and is to be nearer £18 million for this year, and given all the disaster and emergency planning that has had to be planned for during the past 12 months, most people outside would think that a relatively small increase from £14 million to £18 million was reasonable—

Madam Deputy Speaker: Order. Interventions should be much briefer.

Mark Field: Does the hon. Gentleman feel therefore that—

Madam Deputy Speaker: Order. I call Mr. Knight.

Jim Knight: I shall try to pick away at what the question might have been. I would not be happy to see funding continue at £14 million and I am happy to see that increase.

David Wilshire: Will the hon. Gentleman give way?

Jim Knight: I have been generous in giving way and I would like to make progress. However, I will give way to the hon. Gentleman, who has such a pleading face.

David Wilshire: I am only asking the hon. Gentleman to extend to me the courtesy that I extended several times to him. I warn him that I may have several more interventions to come. I thought that I was cynical but I have heard a level of cynicism from him that I could not surpass. His suggestion that local government will have a spending spree over the next couple of years if we pass the amendment, and will stoke up natural disasters so that it can put in bills, is the sort of cynicism that I am surprised to hear.

Jim Knight: I have spoken to the chief fire officer in Dorset and to chief executives of local authorities, and they have a number of concerns relating to various threats. My constituency office is on a site that is regulated by the nuclear installations inspectorate which, in turn, is policed by the nuclear police. They have concerns in terms of biological, nuclear and chemical threats. If every authority thought that it needed more suits, showers or other things, the bill could get out of control. We may need an assessment of where the risks really are in order to balance the priorities. That is not total cynicism, but I know how strapped for cash local authorities can be. If they see a window and a chance to get what they need, they might leap through it without looking first.
	I have concerns about the amendment tabled by the right hon. Member for Berwick-upon-Tweed (Mr. Beith), which are along the same lines as those expressed by my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller). The amendment tries to anticipate the review and does not deal with the Bill. I agree with my hon. Friend that the Bill is about the here and now and deals with the problem that arose in Merseyside. After 11 September, the review is vital for England and Wales. We desperately need it, and we must look also at statutory powers and the levels of funding that underpin those powers. We will need legislation; perhaps not just one Bill, but others.
	I do not have a problem, as Conservative Members seem to, with the notion of closing a loophole, finishing a review and proposing legislation that arises out of the review.
	For example, I was sent a letter by the chief executive of Purbeck district council regarding local authority responsibilities in relation to marine pollution. I am responsible for most of Poole harbour. Let me correct myself; happily, I am not responsible for it personally, but most of Poole harbour lies within my constituency, as does the Wytch Farm oil plant, which is run by BP and located in a highly sensitive area that has just been granted world heritage status by UNESCO.
	The authorities concerned with these sites, including the Environment Agency and the county council, should agree a joint memorandum of understanding about the responsibilities assigned to them in the national contingency plan, but, because they have no statutory powers—and they certainly have no finances with which to produce such a memorandum—they have not agreed to sign it. A recent emergency planning exercise in the harbour—entitled Poolespill—examined the possibilities of major oil pollution on the world heritage coast. That exercise revealed all sorts of problems that need to be addressed, and I sincerely hope that my hon. Friend the Minister will listen carefully to Opposition Members, and to my hon. Friend the Member for Ellesmere Port and Neston and me, when we argue for more finance as a result of the review.
	I hope that the Minister will also consider the powers that the various authorities hold. The fire authority does not have the power to deal with anything other than putting out fires at the moment. It is still covered by out-of-date legislation, which needs to be updated to deal with the threats that have arisen following 11 September, and with other forms of accident response.
	I am sure that many hon. Members have attended many pleasurable party political conferences in Bournemouth, and I hope that all parties will continue to return to Dorset for their conferences. My guess is that those conferences represent the biggest risk of large-scale terrorist attacks for Dorset, and it is worth reminding the Minister that, although the police are reimbursed for the cost associated with political conferences, the fire authority is not. The fire authority incurs significant extra costs related to the running of the conferences in Bournemouth—two were held there last year. The Department of Health has now contracted fire authorities to carry out the necessary decontamination in the case of a chemical or biological attack, but I do not know whether they would be reimbursed for that work.
	I am grateful for your indulgence, Madam Deputy Speaker, in allowing me to run through some of the reasons that I would like more statutory powers and more finance to come out of the review. The Bill is needed to close the loophole revealed by the Merseyside case. We need the legislation now, without further delay, but I am looking for a commitment from those on the Front Bench that proper resources and statutory powers will come out of the emergency planning review.

Tim Collins: New clause 1 has enabled us to have a useful discussion about the current status of the Government's civil defence review, which, of course, started long before the events of 11 September but has no doubt been greatly informed by them. I have some questions for the Minister about that. I agree with my hon. Friend the Member for Spelthorne (Mr. Wilshire), however, that amendment No. 1 has the stronger case behind it. It is similar to points that my right hon. and hon. Friends and I raised at earlier stages of the Bill's consideration, and were it to be pressed to a Division, we would be inclined to support it.
	I strongly endorse the tributes paid—on both sides of the House, I am delighted to say—to the work of the emergency planning officers. They are not the most glamorous of our public servants, and they do not have television series such as "London's Burning", "Casualty" or "The Bill" made about them. None the less, they play a very important role in the provision of emergency services in this country. Whether they are involved in military operations or emergency responses, it is the logistics and the pre-planning—the work done in advance—that can make all the difference to the effectiveness of the ambulance men, fire service personnel or police officers on the ground, and it is important that we should all pay tribute to their work.
	It is also worth noting that since we had a bit of a discussion between the parties about the level of the Government grant—the Minister is smiling now—we have seen an interesting example of a rare but not entirely extinct event in British public life: Parliament working. The Minister appears to have listened to the representations that were vigorously made to him by the Opposition parties, both on Second Reading and in Committee, that he should not continue with the policy, which he inherited from his Home Office colleague, of reducing the grant from about £19 million to about £14 million in the coming financial year.
	I do not know whether the Minister had a tussle with the Treasury or whether it was simply an easy conversation with an old pal, but we congratulate him on having succeeded. That is why we are not expecting a 25 per cent. cut, as we were at an earlier stage.
	However—the Minister would not expect such an encomium to conclude without at least one "however"—there are still a few points on which it would be helpful to have clarification. When the Bill was introduced, the explanatory notes said that expenditure in the present financial year was expected to be about £19.5 million. Last week, however, in the welcome parliamentary answer to the hon. Member for Ellesmere Port and Neston (Mr. Miller), it was said that in the next financial year expenditure would be roughly the same as in the current financial year—£18.6 million.
	When the House decides whether it should support amendment No. 1, which would postpone implementation of the Bill, it would be helpful to know whether £18.6 million is a revised, updated and more accurate assessment of expenditure in the current financial year, or whether we are still facing a reduction. As the right hon. Member for Berwick-upon-Tweed (Mr. Beith) rightly said, it would also be helpful if the Minister clarified the basis on which that figure was calculated. Parliamentary representations are a splendid basis on which to take public expenditure decisions, but they are not always the most stable and predictable indicators for local authorities, so it would be helpful to know how the figure was produced.
	Secondly, will the Minister confirm that even if spending in the current financial year will be £18.6 million rather than £19 million, the Government's proposed grant for the next financial year, although not a swingeing cut, as was at one time feared, is still a freeze? There certainly will not be an increase, so it is difficult to say that changes have been made in response to the events of 11 September.
	In that context, does the Minister recognise that the reason why many people outside the House would think it appropriate for the Bill to be passed only if a delaying amendment such as amendment No. 1 were made is that there will be incredulity at the idea that the Government are introducing legislation on emergency planning and civil defence that is not wanted by emergency planning officers at this stage, and which makes it possible for the grant to be capped, at best, if not reduced in real terms?
	Is the Minister aware that I have seen a copy of a letter sent to him a couple of weeks ago by the honorary secretary of the Emergency Planning Society, who wrote from the emergency planning unit of Hampshire county council:
	"The overall effect of floods, fuel supply problems, foot and mouth and the increased terrorist threat have demonstrably increased the workloads of local authority emergency planning officers . . . We believe there is now a significant shortfall in the numbers of personnel required to prepare and maintain plans, provide adequate training and respond to emergencies of an increasingly more frequent nature".
	In other words, there is considerable concern among the professionals who have to deal with emergency planning about the amount of grant that the Government provide even now—although I repeat that £18 million or so is obviously preferable to £14 million or so.

Andrew Miller: As the hon. Gentleman is praying in aid that letter, with its reference to fuel supply problems, will he now condemn the people who sought to create emergencies in my constituency?

Tim Collins: I am not sure whether we should go too far into who was responsible for what in connection with the fuel shortages in September 2000. I shall take the hon. Gentleman's attack on successive Labour Budgets in the spirit in which it was intended.
	I suspect that the most the Minister will be able to say is that the Government have, on reflection, decided to keep spending roughly at present levels. However, it is notable that even at present levels of funding, there are difficulties. For example, the county emergency planning officer of Oxfordshire says that internal funds have been spent on planning for the countering of a toxic chemical threat. In other words, the local authority had to transfer resources from other areas of its expenditure to deal with that crucial and worrying aspect of the post-11 September threats, because present funding levels were not adequate. Similarly, the officer for Gloucestershire is worried that many members of the public assume that there are large numbers of men in suits, as he puts it, ready to deal with threats of toxic or chemical warfare, when in fact there are not.
	Amendment No. 1 has particular merit, in that the context in which such decisions are being taken will presumably be much clearer in a year's time. A number of Conservative and Liberal Democrat Members have made the case for a delay for reconsideration, because we are still in a position of flux. When the Bill was originally introduced, the events of September 11 had not occurred. When the Bill had its Second Reading and was then considered in Committee, the war in Afghanistan was at an earlier stage. We still do not know the exact nature of the external threats facing our country after the successful and wholly admirable actions taken by the United States Government in Afghanistan draw to a close. However, we do know that in some respects the position is even more worrying than before. I do not wish to dilate at any great length on the discovery of British citizens in Afghanistan who had been serving with Taliban forces. It is simply enough, for these purposes, to recognise that the Government, in drawing up the Bill, cannot have been aware that there would be a number of British citizens, normally resident in this country, prepared to support a terrorist threat from that quarter. That is necessarily a matter of concern.
	I do not propose to go into the matter in any further detail, beyond using it as an opportunity to ask the Minister if he could address some of the issues relating to the review and the territory that it will cover. The review is intended to be fairly broad and all encompassing. The emergency planning officers who are deeply sceptical about the Bill are strongly in favour of the Government's review and hope that it will be undertaken swiftly.
	When does the Minister expect to conclude the review? When do the Government propose to introduce legislation on the back of it? It is clear that a strong consensus exists in central and local government that new legislation will be required comprehensively to overhaul and replace the Civil Defence Act 1948. Have the Minister and his colleagues had full and detailed consultations with other Governments about the conduct of the review? Has he sought the views of Tom Ridge, who has been put in charge of homeland defence by the United States Administration? Is there not an important European Union dimension to this? We are clearly facing common threats and there may be a case at least for pooling experience if not for a joint response.
	I should like to add my congratulations to those expressed earlier in the debate to the people who worked as trading standards officers and emergency planning officers at the height of the foot and mouth crisis. My county of Cumbria was the worst affected in the country. About half the cases in the United Kingdom were in Cumbria, and an awful lot of people worked extremely hard. Can the Minister tell us, either now or later—I appreciate that he may need to write to some of us—whether the Cabinet Office's review of emergency planning will be closely linked with the work being done by the various Government-established inquiries on the lessons of the foot and mouth crisis? In particular, will the Cabinet Office ensure that there is a published contingency plan in the event of a further outbreak of foot and mouth?
	How will the review address the post-11 September concerns that many right hon. and hon. Members will have on behalf of their constituents who live near nuclear power stations? Sellafield is not in my constituency but it is in my county and—as one of my constituents rather chillingly pointed out—only 25 miles away as the fall-out flies. In the light of the events in New York a few months ago, what will the review have to say in respect of air and other defences for such facilities?
	Many people who have contacted me or my office—including professional emergency planning officers—have stressed the importance of the Government rapidly introducing what they describe as "positive legislation". Those people regard the Bill as a negative measure. They do not think that the timing is appropriate—that is why amendment No. 1 has so much to commend it.
	I am thinking in particular of the words of Patrick Cunningham. He is the chief emergency planning officer for Durham and Darlington, but he contacted my office on behalf of the Emergency Planning Society. He said that the figure of £18.6 million—the increased figure that the Minister may be about to tell us reflects the seriousness with which the Government have approached the problem—
	"was set in March, and does not take account of the increased workload of emergency planners due to foot and mouth, flooding, more recently the increased terrorist threat . . . The Bill is particularly disappointing for practitioners after all that has happened this year. There is 100 per cent. support for positive emergency planning legislation arising out of the emergency planning review, but we are told that it may take three or four years to get that . . . We are crying out for positive legislation but instead they"—
	the Government—
	"are insisting on pushing through this piece of negative legislation."
	The hon. Member for South Dorset (Jim Knight) drew attention to the possibility that, without legislation or if the legislation were delayed, as it would be by amendment No. 1, local authorities might go on a spending bonanza. Mr. Cunningham, who understands precisely how the system works at present, points out:
	"The legislation sends the wrong message at the wrong time and suggests that they mistrust emergency planning officers by saying that if we are allowed to apply for funding we will apply for too much."
	The point is that at present the officers can apply for funding only for precise and specific purposes and it must, in most cases, be negotiated with the Government in advance. That is why it would be more appropriate for the present arrangement to continue until the international situation is clarified and the overall Government review of the relevant legislation is concluded.

Andrew Miller: Will the hon. Gentleman give us an insight into the view of the official Opposition on which formula might replace the current one? That might enlighten our debate.

Tim Collins: I am grateful to the hon. Gentleman for that question, although I was under the impression—perhaps mistakenly—that all my remarks clarified the view of the official Opposition on these matters.
	As the hon. Gentleman will recall from my comments in Committee, our position is that while Her Majesty's Government say that the scale of the international crisis facing our nation is such that the provisions of the Human Rights Act 1998 must be suspended—for reasons that the Home Secretary has explained and which I do not question—it is inappropriate to introduce legislation that would at best cap in real terms and at worst reduce in real terms the amount available for the vital national function of emergency planning. As the hon. Gentleman well knows, we are talking not about billions or tens of billions, but about a few million pounds.
	I hope and believe that we are also talking about a short time frame—months rather than years. It would thus make more sense to us—as it does to the Liberal Democrats—if the Government paused and reflected on the fact that emergency planning officers overwhelmingly do not want the measure now. They are saying clearly, "Please bring in overarching, positive legislation to put things on a proper basis before you make changes to the operation of the funding formula that will not be regarded with enthusiasm."
	I close my speech simply by saying that we hope that the Government's review will be completed speedily and that the Minister will make it clear that much more positive legislation will be introduced, ideally in the current parliamentary Session, but certainly no later than next Session. In particular, as we have been discussing the review, I press the Minister to tell the House whether he can guarantee that legislation to restructure the Civil Defence Act 1948 will be introduced before this Parliament is concluded.

Christopher Leslie: We have been debating new clause 1 and amendment No. 1 for some time and many issues have arisen. I shall try my best to address many of them, not least because certain hon. Members seem a little confused about the Bill's purpose, so I should like to elaborate on it and perhaps remind them of the debates that took place in earlier stages. It is interesting that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) now speaks for the Liberal Democrats on the Bill, given that the hon. Member for Winchester (Mr. Oaten) did so in Committee, and the hon. Member for Bath (Mr. Foster) on Second Reading, so there may have been a reshuffle.

Alan Beith: There has.

Christopher Leslie: I missed it. I apologise to the right hon. Gentleman and congratulate him on his new position. I am sure that the usual courtesies will apply in future debates.

David Wilshire: The hon. Gentleman may care to predict who will handle the debates on any Lords amendment to the Bill on behalf of the Liberal Democrats.

Tom Levitt: Or even on Third Reading.

Christopher Leslie: Or even on Third Reading, as my hon. Friend says.

Mark Field: Perhaps the Liberal Democrats have the hon. Member for Shrewsbury and Atcham (Mr. Marsden) in mind as a replacement in the next reshuffle.

Christopher Leslie: I am afraid that I cannot recall that constituency at the moment.
	We need to focus on the Bill's purpose. It primarily deals with the consequences of the Merseyside legal challenge, which prevented the Government from following the normal practice of local government expenditure—instituting a formula to distribute money across all 179 different authorities entitled to receive the grant, which led to the demand-led system that we discussed a little earlier. It seems strange that there is a reluctance, especially among those on the Liberal Democrat Benches, to apply a formula for the distribution of grant. Various tests certainly have to be considered, and local authorities cannot make unreasonable demands. Even so, I had hoped that the right hon. Member for Berwick–upon–Tweed would have considered previous debates in which we explained the necessity of having a nationally strategic approach to the distribution of money to ensure relative fairness and equity across the country in the way that the grant—a relatively small sum—is distributed between those local authorities.

Alan Beith: Of course, I carefully read the reports of the proceedings in Committee and on Second Reading, and I referred to them in my remarks, as well as to the forecast made by the Minister's predecessor, who was in the Home Office, that the Bill would enable a reduction from £19 million to £14 million in the amount spent. However, does he not recall the answer given to the hon. Member for Ellesmere Port and Neston (Mr. Miller) in which it was not made clear whether any formula would be applied in the coming financial year? It merely said that £18.6 million would be the approximate figure. The Government have clearly not decided whether to use a formula in the year that we are discussing.

Christopher Leslie: Of course, I recall the answer that was given to my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller)—I gave it. The right hon. Gentleman wonders whether we intend to impose a formula for the next financial year, but that is essentially the entire purpose of the Bill. As I shall say in discussing amendment No. 1, we need to have a framework for the next financial year, so that we can ensure that the money is distributed fairly. Without that framework, we shall continue with the haphazard, demand-led system, which is not compatible with a nationally strategic approach to distributing the grant.
	As hon. Members on both sides of the House seem to acknowledge, the Civil Defence Act 1948 is relatively anachronistic; it was drafted after the second world war and focuses primarily on hostile attack. We acknowledge that there is now a need for significant reform, and it is perfectly fair to discuss new clause 1, under which the Government would have to publish the report by April, in the spirit in which it was tabled—to maintain the momentum to publish that report—but I would not want it to be enshrined in legislation for obvious reasons.
	The discussion document on the emergency planning review was published in August, and the consultation ended on 31 October, although some of the comments that have been made in the Chamber today are entirely relevant for consideration. More than 260 responses to the consultation have been received, and I have been considering them, the funding mechanisms that we have been discussing, the co-operation that we can achieve between the different authorities and how we can aim for greater consistency of approach between them—the issue raised by my hon. Friend the Member for Ellesmere Port and Neston.
	The consultation exercise has been extremely useful and has yielded a lot of new information. We have held discussions with our European counterparts, as well as internationally, about which the hon. Member for Westmorland and Lonsdale (Mr. Collins) asked. I hope that, in so far as we can, we can comply with the code of conduct on consultations and publish the responses in the usual way. We now intend to set up a project team in the civil contingencies secretariat to work on the next steps and to consider the strong duty of partnership that we seek to develop—about which my hon. Friend the Member for South Dorset (Jim Knight) asked—and further, deeper reforms and legislation may be required. I cannot give specific commitments on the timing of any legislation or on what parliamentary time is available, as the hon. Member for Westmorland and Lonsdale knows. We will have to discuss those matters, and we shall make an announcement on when and if we can do so.
	We shall continue a dialogue with all the stakeholders involved, particularly the Emergency Planning Society and the Local Government Association, and I shall certainly report to Parliament on the progress in due course. There is no need for a formal, imposed primary legislative duty to be placed on me to report. I shall try my best to keep my word and to inform and update Parliament. That is why new clause 1 is unnecessary, and I urge the right hon. Gentleman to withdraw the motion.
	Under amendment No. 1, the Bill's implementation would be delayed for a year. The Liberal Democrats tabled a very similar amendment in Committee, which was voted down on that occasion. Amendment No. 1 is essentially contrary to the Bill's purpose. It would prolong the demand-led system and prevent a nationally strategic approach from being introduced. The emergency planning review is, of course, extremely important, but the civil defence grant needs to be paid for ongoing work in the next financial year.
	We cannot ignore the fact that the next financial year is approaching relatively swiftly, and we need to ensure that our house is in order before then. We need to return to good budgeting practices as soon as possible, and sticking with the haphazard, demand-led approach would be an abdication of our national responsibilities. We have to act responsibly and maintain discipline over public expenditure, however small the sum involved. I intend to publish the Government's plans for a formula shortly, following the consultation that I intend to undertake. The formula is likely to be similar to earlier approaches that have been used.
	The hon. Member for Westmorland and Lonsdale asked about money. As has been mentioned earlier, on 23 January I announced that, subject to the Bill being passed, we intend to maintain the total grant at this year's level—currently estimated at £18.6 million. Representations have been made for more money—a natural phenomenon, which we have noticed in many other circumstances elsewhere—but it is fair to say that a 28 per cent. increase on last financial year is reasonably generous and should be welcomed as far as possible.
	The hon. Member for Westmorland and Lonsdale mentioned a technical point in relation to £18.6 million sum. I shall try my best to explain why that is the right figure, even though £19.7 million was mentioned in the explanatory notes. He may recall that, in Committee, I talked about the practice of paying 90 per cent. in September or October, and 10 per cent. for accounting purposes in the subsequent financial year. We now know that the 90 per cent. figure comes to £16.7 million, so the rough estimate is that the final figure is likely be £18.6 million. The figure remains an estimate but it is as near as possible to the final figure.

Tim Collins: The Minister will know that emergency planning officers will pore over these proceedings with particular interest, so will he clarify two points? First, if it turns out that the figure of £18.6 million is slightly below actual expenditure in the current financial year, will he assure us that whatever formula the Government use will ensure that the finance available in the next financial year will be varied accordingly? Secondly, will he tell us which financial formula he has used to work out the figure? That question was asked by the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and it is nice that the Minister has come up with a formula that appears to be almost identical in cash terms in one financial year after another. What is the basis for it?

Christopher Leslie: As I was trying to explain, we now know that payments of £16.7 million were made in October, which is 90 per cent. of the likely total. That brings us close to the figure of £18.6 million. However, that does not mean that we have a formula for the next financial year. That is what we are working on now, and that is the purpose of the Bill. I have referred to the aggregate grant level and, in seeking to resolve the question of finance, the figure of £18.6 million is likely to be the same as for this financial year.

Alan Beith: Is the formula, whatever it is, designed to preserve roughly the distribution that authorities have now or is it likely to lead to a redistribution of the £18.6 million figure between authorities?

Christopher Leslie: As I was saying, we must consult on the formula that we intend to use. We intend to use a formula to distribute the grant and that is why we are trying to pass the Bill. If we move beyond this legislative stage, I will be able to consider which formula to use. As the right hon. Gentleman will know, the emergency planning review is considering whether the standard spending assessment is the best way of distributing the money and we have considered the representations that have been made. He winces and I take that as one such representation.
	We should use an approach similar to that which existed before the Merseyside legal dispute, and I shall consult the Local Government Association on that. We could discuss formulae until the cows come home, but I am not sure how feasible or realistic it would be to base the formula not on acreage or on a per capita assessment but on, as has been suggested, the threat assessment for each authority. I should like to use something that is similar to, and that could build on, the approach that was used previously.
	We are not so close to the next financial year that we cannot establish a formula approach. It is important that we have equity and fairness so that all local authorities believe that the system for allocating the grant is transparent. Shortly after the Merseyside legal challenge, local authorities were notified that new arrangements for 2002-03 were our target. The Government's intention has been plain from the outset.
	I hope that I have dealt with most of the points raised in the debate. I urge the right hon. Gentleman to withdraw his new clause.

Alan Beith: I may be able to help the Minister in one respect if not in another. He asked me why I was the Liberal Democrat spokesman on the Bill. In addition to my happy duty shadowing the Deputy Prime Minister—although not in all his travels—it was thought that I should take on the rest of the Cabinet Office responsibilities that are nominally his. That is why I have a role on this Bill.
	Reading between the lines, the Minister made it pretty clear that the figure of £18.6 million will be retained for the coming year and that he will devise a formula that will probably not disturb the distribution between authorities. In other words, the Government will probably invent a formula that fits the facts that already exist. If that is so, we do not need a formula and there is no problem with waiting until the following year in the way suggested by amendment No. 1.
	Such has been the wide support expressed in the House for amendment No. 1 that I will ask you, Mr. Deputy Speaker, to agree to a Division on it at the appropriate stage. I wish, however, to withdraw the motion on new clause 1, because the Minister expressed his intention to keep the House informed on the progress of the review. I would have been happier if we could be absolutely certain that that would happen. None the less, I beg to ask leave to withdraw the motion.
	Motion and clause, by leave, withdrawn.

Clause 1
	 — 
	Civil defence: grants

Tim Collins: I beg to move amendment No. 2, in page 1, line 21, at end insert—
	'only in respect of an increased determination'.
	The debate on the amendment will enable the Minister to place on the record the Government's view of a point on which many local government emergency planning officers have sought clarification. The amendment would add a few words to proposed new section 3(3)(b) and would limit the powers that the Bill otherwise gives to the designated Minister to
	"vary a determination by a further determination"
	so that, in the words of the amendment, that could be done
	"only in respect of an increased determination".
	There is much understandable concern among emergency planning officers that the Government may choose, on what local authorities may perceive to be wholly arbitrary grounds, to reduce a grant allocation in a financial year and after local authorities have begun to spend money on the basis that they would receive a certain level of grant to underpin it. At various points, the Minister has been at pains to assure Members of the House and members of the Committee that considered the Bill that such unworthy thoughts would not even cross his mind and that he would never want to do that.
	The matter was discussed in Committee and I pay tribute to the Minister for writing to the hon. Member for Winchester (Mr. Oaten). In the letter, which was copied to members of the Committee, the Minister was at pains to say that it was highly unlikely that the Government would ever consider cutting local authorities' grants in the middle of the year. The only reason that they needed the power would be to take account of unexpected contingencies in which he implied the Government would seek to provide additional help.
	That formulation caused considerable interest in the emergency planning department serving Herefordshire and Worcestershire. Its emergency planning officer wrote to my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) and, in an interesting choice of words, said that the copy of the letter to the hon. Member for Winchester was extremely interesting. With a degree of irony, the emergency planning officer added:
	"Being naive politically and legally, I had to wonder, if the purpose of Section 3(3) is to enable Central Government to be able to make extra payments in unforeseeable situations, why it could not have been framed to say that, rather than the wording currently in the Bill, which could equally reduce grant at a whim?"
	That struck me as an extremely good question. If there has merely been an oversight on the part of the parliamentary draftsmen, it will be easy for us to correct the matter on Report to ensure that the Bill fully reflects the Minister's intentions. Therefore, I genuinely hope to hear the Minister tell us that, on reflection, he accepts the aims of amendment No. 2. Even if he feels for some reason that escapes me that the amendment is technically defective, I hope that he will agree to the issue being reconsidered in another place.
	However, on a crucial matter of emergency planning, I certainly do not wish to hear that the Government plan to retain the power to cut a grant in the middle of the year. Local authorities incur expenditure on the basis that they will receive a certain level of grant and that grant should not be cut in a way that they cannot possibly foresee, so I hope that the Minister will not oppose the amendment on anything other than the most narrow technical grounds. If he does, we should like to know why, contrary to the view of many emergency planning officers, he believes that it would be sensible for him to have such a power.
	It is important to reflect on the fact that local authority emergency planning officers are already extremely worried about the consequences for staffing levels, for funding provision and for their ability to conduct operations on the current basis, let alone on what might come into effect if the Bill is introduced without amendment No. 2. Does the Minister agree with the Emergency Planning Society that we are talking about "an increasingly important service"? Does he also agree with it that local authorities across the country are increasingly having to subsidise their emergency planning functions from other elements of the council tax and other resources that are available to them? Is he aware that a number of local authorities have said that current funding levels are so difficult to predict and inadequate in their scope that some of them may have to pay for up to 50 per cent. of all their emergency planning functions from their own resources?
	I hope that the Minister will assure us that the Government will at least reflect carefully on the strong views that have been expressed by many county emergency planning officers who are genuinely and powerfully concerned about the flexibility that the Government are taking for themselves in proposed new section 3(3). A large number of local authorities believe that that is the heart of what they describe as negative legislation and that it will have extremely damaging consequences for them.
	On Second Reading, the Minister specifically stated that he believed that the merit of the Bill was that it offered stability for local authorities. I see that he is nodding to confirm that that remains one of the objectives. I am sure that he would therefore agree that, in terms of stability for local authorities and their ability to plan ahead, it would be far better to tell them that if there are to be any changes in the amount of grant that is allocated to them for a particular financial year, between the start of that year and its end, they will only be by way of extra resources that are provided in case of unexpected and worrying developments. They need to know that they will not face a reduction or even a clawback of a grant allocation that has already been made available.
	Local authorities are worried. That concern has been expressed by, among others, the chief emergency planning officers of Cumbria, Cheshire, Essex and Durham. There are large-scale worries. Will the Minister address the merits of the amendment? In particular, if he is not prepared to limit his power to cut a grant in year, so to speak, will he explain the precise circumstances in which he will use the power? If he insists on retaining it, there will be widespread concern in local authorities that he could simply use the power arbitrarily. It would be helpful if he agreed to publish a code of practice under which ministerial decisions exercising such a power would be limited or preferably removed altogether.

Mr. Deputy Speaker: Amendment proposed—

Richard Younger-Ross: rose—

Mr. Deputy Speaker: Order. It is a great help to the Chair if hon. Members indicate that they wish to participate in the debate because otherwise we might have swept on.

Richard Younger-Ross: I shall redress that next time I want to speak.
	I shall be brief. My first knowledge of civil defence was as a boy scout. It was not so much the motto "Be prepared", which would be a good motto for civil defence, but partaking in a Civil Defence Corps exercise, that gave me an understanding of what was required to be prepared for a civil emergency.
	The local authorities that I have spoken to and others that I have heard from are concerned that if the grant is fixed at £18 million and the needs of only some authorities are taken into account, there will be winners and losers. In Committee, the Minister referred to
	"increases or reductions in grants".—[Official Report, Standing Committee E, 11 December 2001; c.8.]
	Can he assure local authorities that their grants will not be reduced? They think that they have only just managed to secure adequate funds for the needs of civil defence.
	We want the determination of grant to be upwards to recognise current needs. We do not want a "Goosey- Goosey Gander" approach that leads local authorities upstairs and downstairs; nor do we want civil defence to end up like Jack and Jill, to continue the nursery rhyme. Rather than a brown paper and vinegar solution, we need a well thought-out and exercised plan. As a country, we tend to be under-prepared for disasters. We have only to consider the problems of the railways when the wrong leaves or the wrong snow are on the line. It is important that we do not have the wrong measures in place when a disaster strikes. All authorities need to have well- exercised plans and well-trained staff and to have the funding to put their plans into effect.

Joan Walley: I do not want to detain the House unnecessarily. I merely ask my hon. Friend the Minister to look closely, during the time that it takes for the Bill to complete its stages here and in another place, at the work of the Staffordshire emergency planning service. It has written to me and I understand that the chairman of the Stoke-on-Trent and Staffordshire fire authority has written to the Deputy Prime Minister. We have a wonderful record of joined-up processes to consider the whole issue of civil defence in Staffordshire. There are genuine concerns about the level of grant should there be any large-scale change to the formula on which funding is allocated. Will my hon. Friend look closely at the work that has been done in Staffordshire and consider how that can be retained without any loss of service?

Christopher Leslie: I shall look with care at the representations made by my hon. Friend's authority. Indeed, last week we announced the funding allocation for the next financial year, and we have tried to maintain the level as close to £18.6 million as possible.
	Amendment No. 2 attempts to ensure that the grant can only ever increase. I reiterate that the £18.6 million—or whatever closely similar amount is determined once the estimate is resolved—is a significant increase on last year's grant. Indeed, in Committee the hon. Member for Westmorland and Lonsdale (Mr. Collins) said that if I promised to provide a grant that is maintained at this year's level, most hon. Members' objections would melt away. I hope so.
	The debate on the amendment echoes what was said in Committee on the flexibility powers that are given to Ministers, who will be obliged to exercise discretion reasonably. They must base decisions on relevant matters and use powers with due care and consideration. I am afraid that I must inform the hon. Member for Westmorland and Lonsdale that there are technical reasons why the amendment is severely deficient. It would have a number of perverse consequences. I tried to explain that currently, 90 per cent. of the grant is paid in September or October, and the remaining 10 per cent. in the subsequent financial year, when the moneys spent have been verified by the district auditor.
	The practice of not paying the last 10 per cent. of a grant until audited accounts have been presented would be inhibited if the Government had limited powers to deduct or disallow expenditure from the outstanding balance if that expenditure proved not to be for the purposes for which it was intended. That is National Audit Office best practice, and I am advised by my officials that it would be compromised by the amendment.

Tim Collins: I have no reason to challenge what the Minister said about the amendment's technical merits, but he will be aware that we are talking about the Minister's power to vary the determination of the grant, not about how local authorities spend money within that target. Why is it a good idea for Ministers to have the right to set a certain level of desired expenditure in a financial year and then cut that amount during that same year?

Christopher Leslie: The hon. Member for Teignbridge (Richard Younger–Ross) was talking about whether a formula would create winners and losers. Of course, all formulae have that consequence; it is in the nature of allocating resources from a national to a local level. If we manage to return to a formula, we will try to make it as fair and equitable as possible and we will publish it, but it will undoubtedly create winners and losers.
	The amendment is wrong in principle because it is not responsible budgeting to enshrine in statute an ever increasing grant. We need to retain the ability to make choices and decisions about public finance. Flexibility and discretion in a national strategic framework are especially important in civil defence. As the hon. Member for Westmorland and Lonsdale knows, the previous Conservative Administration steadily reduced the civil defence grant, presumably to reflect the fact that the world was more stable and secure after the cold war. It is a depressing outlook if, as he thinks, we will for ever require inexorably heightened civil defence.
	An amendment in the name of a Conservative Member that is, essentially, a no-cuts amendment reminds me of my early days in politics, when the funding, or underfunding, of services was central to national debate. It is charmingly counter-intuitive. I am not sure what Lady Thatcher would say about a no-cuts amendment. Indeed, I wonder whether that particular spending commitment has been cleared with the shadow Chief Secretary, the hon. Member for Buckingham (Mr. Bercow). Perhaps the hon. Member for Westmorland and Lonsdale might like to give a similar commitment on funding for schools and hospitals. This no-cuts approach is enlightening, and I find this new development in Conservative policy very interesting.
	There are good principled and technical reasons for opposing the amendment, and I ask the hon. Gentleman to withdraw it.

Tim Collins: I am grateful for the Minister's remarks. Without going into the byways of wider public expenditure policy, I point out that he seems determined to retain the right to tell local authorities at the beginning of the financial year, "You may spend X," and in the middle of the financial year to say, "I am terribly sorry, but you may spend a great deal less than X, and we may claw back some of that amount." We are not convinced by his argument and wish to press the amendment to a vote.

Question put, That the amendment be made:—
	The House proceeded to a Division: Ayes 156, Noes 257.

Question accordingly negatived.

Fraser Kemp: The Ayes to the right 257, the Noes to the left 156

Mr. Deputy Speaker: Order. Have I been given the correct information? Will the Tellers come to the Table, please? We will have the result again.

Fraser Kemp: The Ayes to the right, 156; the Noes to the left, 257.

Mr. Deputy Speaker: The Ayes to the right were 156, the Noes to the left 257, so the Noes have it, the Noes have it.

Eric Forth: On a point of order, Mr. Deputy Speaker. It is furthest from my mind to challenge your ruling in any way, but I am intrigued to know what reason you had to believe that the Tellers were not giving correct figures. Presumably, it is for none of us to judge who may have gone through the Aye Lobby or the No Lobby. I accept that you were using your judgment at the time you stopped the declaration of the result of Division in mid-flow, but is there any precedent for doing so? On what basis did you see fit to challenge the figures given by the Tellers?

Gerald Kaufman: Further to that point of order, Mr. Deputy Speaker. When you respond to the right hon. Member for Bromley and Chislehurst (Mr. Forth), I hope that you will explain to him that this is as great a triumph as the Conservatives are going to have in this Parliament.

David Wilshire: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Yes, although the point of order is beginning to peter out.

David Wilshire: Mr. Deputy Speaker, I hope that you will take the comments of the right hon. Member for Manchester, Gorton (Mr. Kaufman) as frivolous. The point of order deals with a serious matter and a clear explanation would be of enormous help, because a result was read out by a Teller. This has never happened in my 14 years in Parliament. Is the result the one read out by the Teller, or that read out from the Chair?

Mr. Deputy Speaker: It was apparent to me that something was irregular. The winning Tellers, who traditionally stand on the right, were reading out something that did not correspond with their position. They noticed that and a correction has been made. I am advised that this is by no means the first time that such an error has occurred.

Clause 2
	 — 
	General

Amendment proposed: No. 1, in page 2, line 24, leave out "2003" and insert "2004".—[Mr. Beith.]
	Question put, That the amendment be made:—
	The House divided: Ayes 157, Noes 261.

Question accordingly negatived.
	Order for Third Reading read.

Christopher Leslie: I beg to move, That the Bill be now read the Third time.
	In the vast amount of time that we have for Third Reading, I wish to point out that the Bill is a modest yet important measure, designed to re-establish good practice in the budget-making process in a small area of policy—the funding of emergency planning preparation in local authorities throughout England and Wales. It does not specify the sums of money to be allocated in the next financial year for civil defence grant; it is concerned solely with the mechanism and framework for doing so, allowing Ministers legally to set a grant in the first place.
	We are endeavouring to re-establish a fair and equitable means to distribute the grant; that is the Bill's precise remit. However, it also provides a number of useful opportunities to pay tribute, as Opposition Members have done, to the sterling work of emergency planning officers the length and breadth of the country. In Committee and on Report, we considered questions of finance and money. Following the Merseyside legal challenge, which caused the demand-led system to be imposed, the Government now estimate that the level for this financial year and the next will settle at about £18.6 million, up from £14 million in the previous financial year.
	I was pleased to announce in a parliamentary answer last Wednesday that following negotiations, we have completed our consideration of what is necessary and affordable. We have decided to maintain the total grant at about this year's level, currently estimated at £18.6 million, which is a satisfactory outcome to negotiations. We are looking at maintaining the 28 per cent. increase on the figure of £14 million for the previous financial year. Fears voiced earlier of cuts have proved groundless. The next stage is to decide how the grant will be distributed and what formula is to be used.
	Much attention has focused on the discretion given to Ministers in the Bill, and I have sought to give assurances about those provisions. I have written to Committee members giving examples of legislation in which different formulae are applied to local authorities; I have also provided information about the formulae that might be applied in the distribution of grant. I can reassure the House that powers in the Bill are not unprecedented, will be used reasonably and will be based on rational judgments.
	I am minded to use a formula to distribute civil defence grant, and anticipate that it will build on the one used most recently; I am still working on the details with officials. We will shortly be able to consult the Local Government Association in a genuine but rapid round of consultation; I am eager that local authorities should know their allocations as soon as possible. An emergency planning review is under way; assumptions have altered, and threats have changed since the Civil Defence Act 1948, which is no longer an adequate foundation. We need to bring civil defence functions more within the delivery of mainstream local government services. We aim to co-operate closely and develop our plans with local authorities and other representative bodies.
	Future comprehensive reform may aim at improving the consistency of approach across the country and promoting best practice. Partnership and community leadership by local authorities is extremely important. Life in the United Kingdom is normally prosperous, peaceful and calm, but we always need to guard against those abnormal and rare threats which may endanger the life of the community, including the hazards of major accidents; the ravages of natural disasters; and the consequences of a deliberate hostile attack.
	The Bill provides the means to fund part of that battle—advanced planning and preparation for civil contingencies at the local level. It may seem a technical measure, but it is essential that the whole nation is ready to cope with whatever eventualities befall us. Our debate today has highlighted the dedication and value of those involved in day-to-day civil contingency planning. I am glad that, should the circumstances ever arise, there are people with a wealth of skill and ability throughout the country who are ready, willing and able to deal with emergencies. It is for the sake of continuing a national strategic approach to civil defence funding that I commend the Bill to the House.

Alan Beith: The Bill is not needed because the figure for the next financial year has already been announced. If the Bill is used, it could result in some emergency planning authorities getting less money in the coming year than they did this year. The matter could, and should, be dealt with when the Government's civil defence review is completed and legislation is introduced to implement it.

Tim Collins: There are 34 county emergency planning officers in England and Wales; no fewer than 24 have expressed strong opposition to the Bill. Patrick Cunningham, chief emergency planning officer for Durham and Darlington, says:
	"We are crying out for positive legislation".
	However, all that officers are getting is "negative legislation" which, Mr. Cunningham says,
	"sends the wrong message at the wrong time."
	Other professionals on whom we and our constituents rely for protection in a national emergency have variously described the Bill as a disaster, a disgrace and peculiarly ill-timed. It is the wrong legislation at the wrong time; we will oppose it.

Question put, That the Bill be now read the Third time:—
	The House divided: Ayes 262, Noes 155.

Question accordingly agreed to.
	Bill read the Third time, and passed.

City of London (Ward Elections) Bill

As amended, considered.

John McDonnell: On a point of order, Mr. Deputy Speaker. I am aware that one of the original petitioners to the Bill has written to you, because the amendments tabled by the promoters would dramatically change the Bill. Mr. Matson has written to you asking that the Bill be referred back to Committee, as those amendments are significant. That would enable him and other petitioners to raise their petitions once more and examine the Bill in detail. I wondered whether you had replied to Mr. Matson, and whether you could share that reply with the House.

Mr. Deputy Speaker: I am grateful to the hon. Member for giving me notice that he intended to raise that point of order. My reply to Mr. Matson is being despatched today. Obviously, it is a matter of judgment whether the Bill would be changed by the amendments to the extent that the hon. Gentleman suggests. In practice, when the question of revival was considered, the Bill on which I had to adjudicate was precisely the same Bill as was brought before the House in the last Parliament. That was the only issue. Of course it is open to Members to table amendments, and it is a matter for Mr. Speaker's judgment as to whether such amendments fall within the scope of the Bill. That was the judgment made in this case. I have advised Mr. Matson that, if there is a matter against which he wishes to petition, he will have an opportunity to do so when the Bill goes to the other place.

John McDonnell: Further to that point of order, Mr. Deputy Speaker. My point also relates to a matter raised by Mr. Matson in his earlier petitions, and to a statement that has been consistently made to the House since the Committee's original determination to refer the Bill back to the House with its recommendations. The City of London corporation promised the Committee that a package of reforms would be implemented in tandem with this legislation. Not a single one of those reforms has been processed, yet time and again they are referred to in the promoters' statement.
	Will you, Mr. Deputy Speaker, examine whether it is possible to encourage the City of London corporation to implement those reforms, because they will bear heavily on the consideration of the Bill in this House, just as they did with the Committee, as reported in its statement?

Mr. Deputy Speaker: That is certainly not a matter for the Chair. Debate on such matters would be outside the scope of the Bill.

New Clause 1
	 — 
	Exclusion of Crown Bodies

'A government department or other body exercising on behalf of the Crown functions conferred by or under any Act shall not be treated as a qualifying body within the meaning of this Act.'.— [Sir George Young.]
	Brought up, and read the First time.

George Young: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this we shall take amendments (a) to (d) and (f) to promoters new clause 1, amendments Nos. 33 and 35, promoters amendments Nos. 1 to 4, amendment No. 47, promoters amendment No. 5 and amendments (b) to (d) thereto, amendment No. 52, promoters amendments Nos. 6 to 8, promoters amendment No. 149 and amendments (a), (b) and (d) to (l) thereto, amendments Nos. 60, 68, 69, 71, 74, 75, 77 to 79, 81 to 84, promoters amendments Nos. 10 and 11, promoters amendment No. 12 and amendment (a) thereto, amendments Nos. 90, 92, 95, promoters amendment No. 13, amendments Nos. 97 to 99, 101, 102, promoters amendments Nos. 15 to 17, promoters amendment No. 18 and amendment (a) thereto, promoters amendments Nos. 19 and 20, amendment No. 125, promoters amendment No. 21, amendment No. 126, promoters amendments Nos. 22 and 25, amendments Nos. 131, 133 and 143, and promoters amendments Nos. 26 to 30.

George Young: With your permission, Mr. Deputy Speaker, I should like to comment on the promoters amendments in the group that you have heroically read out. In the debate on the revival motion on 15 November last year, I referred to the promoters' intention to bring forward amendments to the Bill. I said that
	"amendments will be introduced to remove the proposed voting entitlement based on the rateable value of premises and replace it with a scheme that relates voting entitlement to the number of people who work on the premises."—[Official Report, 15 November 2001; Vol. 374, c. 1034.]
	The new clause and the promoters amendments that we are now considering implement that undertaking.

John McDonnell: Will the right hon. Gentleman give way?

George Young: May I make a little progress? I want to get out of the station before I stop at the first red light. I shall give way to the hon. Gentleman in a moment.
	To secure the changes needed to relate the right to appoint to work force numbers, it has been necessary to make a number of changes to the Bill. However, many are consequential, and I shall focus on the amendments that are central to the changes. I should then like to touch on some of the amendments that the hon. Member for Hayes and Harlington (John McDonnell) has tabled.

John McDonnell: Could the right hon. Gentleman advise us why these amendments were not available to us during the debate on the carry-over? Why was there such a flurry last week? Amendments were tabled and withdrawn within two hours of the deadline, offering little opportunity for consideration by those who may wish to amend the amendments. The City of London corporation has had four years to produce the Bill.

George Young: When I spoke in November, I said that amendments would be tabled to change the basis, and it should have come as no surprise to the hon. Gentleman that such amendments have indeed been tabled. He should welcome them, because the changes that have been made by the corporation take a giant stride towards the case that he has been making for many years. I hope that he will not be churlish about the changes to the Bill. He has that churlish look on his face, so I shall move straight on.

John McDonnell: On a point of order, Mr. Deputy Speaker. Is that parliamentary language?

Mr. Deputy Speaker: I have heard much worse.

George Young: The hon. Member for Hayes and Harlington is definitely not looking churlish at the moment, and I commend him for the good humour that he is now displaying.
	New clause 1 would perform the same function as clause 6. It would exclude Crown bodies, such as Government Departments, from the Bill by providing that they should not be treated as qualifying bodies. No right to appoint would therefore arise. The change is needed because the existing clause relates the exclusion of the Crown to property that is recorded as such on the local non-domestic rating list. The use of the rating list was appropriate when the right to appoint was linked to rateable values. With the disappearance of that link, reference to the local non-domestic rating list is no longer apt. Amendment No. 19 is consequential, and removes clause 6.

Andrew Dismore: I assume that the thrust of the right hon. Gentleman's amendment is to ensure that a United Kingdom Government Department or Crown body could not participate in these new arrangements. What is the position of foreign Governments who may own property?

George Young: I am not sure whether they have any property that qualifies. I think that there is an amendment about the European Union, and having made inquiries, I am not sure that it has a building that would qualify. We will make diligent inquiries to see whether foreign Governments own accommodation in the City.

John McDonnell: I am surprised that the right hon. Gentleman, who is sponsoring the Bill, is not aware that this legislation, if carried, would enable foreign Governments who have property in the United Kingdom to exercise a vote through various bodies. They would own property and they would employ staff.

George Young: I am grateful to the hon. Gentleman for that comment.
	Amendment No. 1 would remove the definitions of "hereditament" and "non-domestic rating list".

Andrew Dismore: Will the right hon. Gentleman give way?

George Young: I should like to make a little more progress.
	With the change from rateable values to size of work forces as the parameter by which the extent of the right to appoint arises, those definitions are no longer needed.
	Amendments Nos. 2, 3 and 4 would change the way in which "occupation" is defined to take account of the removal of any reference to "hereditaments". The term "premises", which is a standard legislative term, is substituted, as "hereditament" is used in rating legislation but not more generally. Entitlements to appoint are no longer ascertained by reference to rateable values, so a rating term is inappropriate.
	Amendment No. 5 would insert "workforce" as a principal definition in the Bill by relocating the definition currently set out in clause 4(2). That relocation is appropriate as a matter of drafting, given the adoption of the work force criterion to generate the right to appoint in place of rateable values.
	Promoters amendments Nos. 6, 7 and 8 make changes to clause 2(2) consequent on the removal of references to rateable values and hereditaments. The practical effect of the subsection is unaltered. Promoters amendment No. 149, originally tabled as No. 9, is central to the changes now being proposed. It would add a new section, 6(1)(c), to section 6 of the City of London (Various Powers) Act 1957, which deals with electoral qualifications, and provides for the entitlement of a qualifying body to appoint any individual to be decided on the basis of the size of the work force.
	New subsection (1A) sets out the extent of the entitlement. For a work force of up to five, one person may be appointed. Each additional five members of the work force will generate an entitlement of one additional appointment, up to work forces of 50. In the case of work forces over 50, the entitlement is tapered. The work force must increase by a further 50 before an entitlement to make an additional appointment arises.
	The taper was selected to avoid dominance by larger firms, and to achieve a total electorate that would not produce a larger component of business voters than the Bill does now. In fact the projected figure declines by about 1,500, giving a total City electorate of approximately 38,500.

Rudi Vis: Will the right hon. Gentleman remind us of how part-time workers will be treated?

George Young: I think that they will qualify if the premises involved are their principal place of work.

Andrew MacKinlay: Paragraph 9 of the statement given us by the promoters states:
	"Residents are currently concentrated in four wards in the City. The wider reforms"—
	which we are discussing—
	"provide that the residential vote will continue to dominate in those wards."
	Can the right hon. Gentleman, either now or later this evening, tell us what estimates have been made of the ratios involved in the four wards?

George Young: I do not carry such important statistics in my head, but I will ensure that the hon. Gentleman receives them. The key point is that the boundaries are being changed so that the domination of the residential vote can be retained in the four wards, thus leaving the balance unchanged.

John McDonnell: I raised the issue of boundary changes in my point of order, because one of the corporation's commitments was that they would be implemented. That commitment was given three years ago to Committee members who are present now, but no attempt has been made to protect residents. Is that not an act of bad faith on the corporation's part?

George Young: I do not accept that criticism. I understand that the boundary changes are going through, although they are not included in the Bill.
	Under proposed subsection (1B), the entitlement of any qualifying body to make appointments would be confined to situations in which the full five, or 50, increase in the size of the work force was satisfied. Remainders are ignored. A work force of nine, for instance, would generate an entitlement to one appointment, because the full step of five additional members of the work force above the one appointment generated by a work force of up to five had not been satisfied.
	The quantitative assessment of the outturn in terms of the number of business voters has been a substantial obstacle to the adoption of a work force-based entitlement. Only through the results of a comprehensive land use survey in which the corporation has been engaged over the past four years—a process involving personal visits both to individual City businesses and to correspondents—has the development of the scheme now envisaged being possible. The survey will need to be updated on a continuing basis through the development of an occupiers' database. That represents a substantial ongoing commitment on the corporation's part.
	The promoters still think that rateable values would have provided the most readily available and easily validated basis for the entitlement to appoint. I note that the Government's recent White Paper, "Strong Local Leadership—Quality Public Services", anticipates the use of rateable values for the voting mechanism for business improvement districts. The promoters have, however, sought to respond to the continuing objections of the Bill's opponents in Parliament to a property-based system.
	The City of London Labour party petitioned against the Bill when it was introduced. I hope that I will not offend my hon. Friend the Member for Cities of London and Westminster (Mr. Field) if I read a short passage from the evidence given to the Select Committee by Mr. Christopher Haines, chairman of the City of London Labour party, to which the corporation responded by tabling the new clause and amendments. He said:
	"We have commended to the Corporation an alternate proposal, that votes should relate to the number of staff employed by bodies within the City, a system we refer to as a payroll vote. We do not by that mean that it is based on the amount of the payroll but rather that the company would qualify for a number of votes depending on how many people it employed within the City, not the total throughout the country. We believe that this would more closely reflect the democratic position of this country as a whole and we understand those traditions are that votes are based on people, not on buildings and not on taxes".
	Mr. Haines went on to point out that such changes should be part of continuing reforms, and that changing the present Bill to achieve the system he proposed would result in substantial amendment. Members will have observed the number of amendments tabled by the promoters. I can tell them that they have been discussed with the officers of the City of London Labour party, who have responded constructively.
	The new scheme maintains—albeit on a different basis—arrangements for the appointment of individuals. I want to say something about that in the context of amendment No. 149. Members should realise that we are not talking about nomination or appointment to the City's governing body. The individuals appointed will become part of the electorate who, with the existing business voters, will be able to participate in the City's ward elections. Using the jargon, one could say that they would form part of the electoral college comprising all the City's voters, who will decide by secret ballot who will represent them on the City's governing body.
	The hon. Member for Hayes and Harlington asserts that there should be no element of appointment or nomination. The link between those who pay for local services and the entitlement to vote in local elections has long been recognised. It is axiomatic that people liable for council tax in any local authority area will have a residence there, and will thus be able to vote for their local council.
	I accept that since the advent of the national non-domestic rate, there has been no such link between payment for local services and the local authority for businesses. The City's position, however, is different. Businesses in the City are uniquely subject to local rating powers. When the national non-domestic rate was being developed, officials at what was then the Department of the Environment calculated that without the local business rate arrangements, City residents would face yearly tax demands of £9,000 each.
	These local business rate powers are not limited to businesses that currently have voting rights; they apply to all City businesses. The Bill as redrafted, however, does not simply give businesses that pay the right to a vote. It links the new entitlement to their work forces, and provides for appointments to reflect the composition of those work forces.

Phil Sawford: I recognise that this represents a fundamental shift from votes for property to an arrangement based on the numbers who work in that property, but there is a whole body of electoral law applying to the normal democratic process. There are many questions relating to part-time workers, the number of registered electors, how we will be able to verify the information and whether these will be British citizens who would be entitled to vote in other elections. Amendment No. 149 shifts the goalposts without setting out the mechanisms. That is what concerns me on the democratic deficit side.

George Young: That is a criticism that the Bill's opponents made when it was in its previous form. There are very good reasons for not setting out in detail the issues to which the hon. Gentleman refers. We are talking about a legal minefield. I believe that some 50 per cent. of legal actions, in the case of industrial ballots, relate to the operation of the law. I think it much better to set out the broad principle that the electorate should reflect the composition of the work force and leave the rest to the good sense of businesses, rather than embarking on a marathon of complex legislation that will end up before the courts. That was in the Bill before, and is unchanged by the shift to which I referred.

Mark Field: May I pick up the point made by the hon. Member for Kettering (Phil Sawford)? I hope that the question raised by the hon. Member for Thurrock (Andrew Mackinlay) will be answered, if not this evening, then at some point in the near future when we have the statistics to hand.
	There is no doubt that the local councillors who will be elected in four largely residential wards will be elected by residents. Whatever formula is used, there is no question of residents' positions being usurped by a block business vote. There is a protection for local residents.

George Young: I am grateful to my hon. Friend for that clarification.

Andrew Dismore: Will the right hon. Gentleman give way?

George Young: I should like to make a little more progress.
	The further consideration, which all those who have an interest in making the system work acknowledge, is that it should be simple to operate. Some of the amendments tabled by the hon. Member for Hayes and Harlington and his colleagues anticipate elections about elections by a system of proportional representation through electoral colleges or ballots, which involve such complexity that they would be guaranteed to ensure that the new system was still-born. That may indeed have been the intended consequence.
	Amendment No. 10 deals with the situation where premises cross ward boundaries. In such cases the premises will be treated as being located in the ward in which the greater proportion of the premises is located. That achieves the same result as formerly provided for by clause 3(5).
	Amendment Nos. 11, 17 and 20 simply change "hereditament" to "premises", to reflect the fact that the scheme is no longer based on rateable values. As I have said, "premises" is a standard legislative term.
	Amendment No. 12 reproduces paragraph 13 of part 2 of schedule l to the present Bill. There are no changes in drafting and the purpose remains the same: to prevent the possibility of "double counting" or an entitlement to appoint individuals arising twice in respect of the same premises.
	Amendments Nos. 13, 16 and 27 deal with a consequential drafting change to refer the reader to the 1957 Act rather than the current Bill and to take account of the other amendments to clause 3.
	Amendment No. 15 takes account of the incorporation of the definition of "work force" in clause 2. As the term is to be defined as part of clause 2(1), there is no need for it to be repeated at clause 4(2).
	Amendment No. 18 is a consequential drafting change to reflect the change from "hereditament" to "premises". It substitutes "premises" for "hereditament" and reorders the concluding words of clause 5(5).
	Amendment No. 25 removes schedule l entirely. The schedule sets out the entitlement to appoint voters relative to the rateable values of premises. With the change to a work force-based system, it becomes redundant.
	The remaining amendments—Nos. 21, 26, 27, 29 and 30—are consequential, but I should refer to amendment No. 28, which concerns the repeals schedule. It may not be clear to the House that this is a repeal and not, I hasten to add, a reintroduction of a £l0 rateable value threshold. With the change to work force size as the criterion for the number of appointments, the references to specific rateable values which were necessary as part of the scheme set out in schedule l become redundant.

Andrew MacKinlay: I wonder whether the right hon. Gentleman could enlighten us. Are places of worship treated as properties? Is there a distinction between Church of England properties, which arguably may be Crown properties, and others? He has referred to Crown properties; no doubt he can answer that point. What would be the position of other denominations that are not part of the established Church?

George Young: I understand that Churches are either unincorporated or incorporated bodies and that those who work within premises owned by Churches would be eligible, although some of the amendments tabled by Labour Members would exclude them.

Andrew Dismore: Will the right hon. Gentleman give way?

George Young: Perhaps I can deal with any other points if there is time at the end.
	I should like to deal with the other amendments that have been selected with the promoters amendments in this group.
	Amendment (a) leaves out reference to bodies other than Government Departments exercising Crown functions under Acts of Parliament from the proposed exception. It is not immediately apparent what bodies are being referred to by the amendment, but presumably they would be Crown bodies other than Government Departments exercising functions under provisions other than Acts of Parliament—perhaps royal charters or the royal prerogative.
	Putting aside that ambiguity, it is not clear why those particular species of Crown bodies should be outside the exception proposed. If there were any such bodies in the City, and the promoters do not know of any, they would achieve a privileged status as against other Crown bodies exercising Crown functions. That would be illogical and I advise the House to reject the amendment.
	Amendment (b) points in the reverse direction and extends the exception by excluding Government- appointed bodies from the Bill's provisions. "Government-appointed" is not defined, but presumably the amendment refers to quangos. The promoters have received no representations from such bodies that their work forces should be excluded, and on the principle of inclusivity, on which the definition of "qualifying body" is based, the promoters would be reluctant to take that course. The effects would certainly be capricious. To take an example at random, there would be no obvious reason to exclude the Advisory Committee for Disabled People in Employment and Training, a quango, if it opened a City office, so I invite the House to reject amendment (b).
	Amendment (c) extends the exclusion from the Bill's provisions to any institution of the European Union. There are no such institutions known to the promoters in the City, and none proposed, which is no doubt why no representations have been made in respect of them. Even if such institutions were present in the City, it would not necessarily follow that their work forces should be excluded. Be that as it may, I advise the House, in the well-worn phrase, that the amendment is unnecessary. I invite the House to reject it.
	Amendment (d) raises the interesting proposition that the Secretary of State should be put in charge of deciding who should be able to appoint people by giving him the power to decide which bodies will be "qualifying bodies". That does not seem an attractive or even—dare I say it?—democratic proposal. It may be said to turn the City into an oversized quango; if so, it would be inconsistent with amendment (b), so I ask the House to reject that.
	Amendment (f) seeks to exclude from amendment (b) the London Development Agency. I have already commented on that amendment but perhaps I should add that apart from the dangers of inequality of treatment to which I have referred, it appears to overlook the fact that, unlike regional development agencies elsewhere, where members are appointed by the Secretary of State, the members of the London Development Agency are appointed by the Mayor under the Greater London Authority Act 1999.
	The other amendments cover familiar territory: the requirements for electoral colleges, for ballots and for proportional representation. A variety of amendments would render the Bill bureaucratic and unworkable. Some exclude voluntary organisations and even trade unions. The amendments have been debated extensively on other occasions and I do not propose to weary the House by repeating the arguments against them.

John McDonnell: I say in passing that we were promised amendments when the carry-over debate occurred in November, but we had no sight of any amendments until Wednesday of last week. Then, one hour and a half before the closing deadline for any amendments to the amendments to be tabled, those amendments, among them the key amendments, were withdrawn and replaced. That is inappropriate behaviour when it comes to democratic and open government.

Diane Abbott: Would my hon. Friend care to speculate on why the flurry of amendments were tabled at the last minute?

John McDonnell: Far be it from me to allege that the promoters are trying to wrong-foot opponents of the Bill.

Phil Sawford: It did not work.

John McDonnell: It did not. However, it smacks of either incompetence or conspiracy.
	The amendments fall into three blocks. First, new clause 1 excludes Government Departments and agencies and various other bodies from participation in City corporation government. It could be seen as a tidying-up measure, but it is sinister in its implications and extremely important. That is why we need to spend some time on it tonight.
	The second block is the promoters amendments, which are a charlatan attempt by the City corporation to deceive the House and naive Members that a compromise is on offer. It supposedly liberates the workers of the City corporation and provides them with an unfettered right to democratic participation in the processes of the City corporation elections. I wish to demonstrate that that is far from the case. It is a cynical manoeuvre to con the innocent, to exploit the feeble minded by sleight of hand and to ride yet again on the backs of the workers who work in the City of London area. Bizarrely, linked to that block is a series of amendments that installs within the operation of the City of London corporation a block vote on the backs of the workers of the City of London area, which is exercisable by individual company bosses. We have seen it before.

Diane Abbott: I am listening with great attention to my hon. Friend's speech, which is remarkably succinct, given the gravity of the proposal before us. He referred to the feeble-minded. Can he give the House an assurance that, in referring to the feeble-minded, he was not referring to any of the occupants of the Treasury Bench?

John McDonnell: How could I? [Interruption.] I will rephrase that. I can give that assurance; how could I refer to occupants of the Treasury Bench in that way?
	The third block is made up of amendments tabled by myself and comrades, such as my hon. Friend the Member for Islington, North (Jeremy Corbyn) and others. We propose a genuine compromise of reform; the opportunity of a real partnership approach to the City of London corporation and its governance; and a stakeholder system of democracy for the City area. Many, if not all, the amendments have been discussed previously, but this is a new Parliament and we have new Members addressing a unique problem. Much of what has been said in the past is relevant today, but we will seek to ensure that we are succinct in the debate.
	New clause 1 sets out to ensure that
	"A government department or other body exercising on behalf of the Crown functions conferred by or under any Act shall not be treated as a qualifying body within the meaning of this Act."
	It replaces the exclusion section contained in the previous legislation, which was based upon the exclusion of Government Departments or those that exercise Crown functions and hold rateable value within the City of London corporation. The clause is an attempt to prevent Government Departments and all agencies carrying out or exercising functions of the Crown from participating in the governance of the City corporation in a way that other bodies will be entitled to under the Bill; that is, by nominating a qualifying voter.
	I oppose the new clause, and I will set out my reasons why. My amendments try to limit the damage of the new clause. They also seek to extend the geographical impact and clarity of the new clause. I want to democratise its implementation by giving Government Departments and other agencies the right to a vote. However, I accept that, in many ways, Mr. Speaker, in his selection of amendments, has grouped together the thread of democracy within the amendments to see whether we can have a principled vote this evening on the issue of workers democracy.
	My amendments seek clarity by updating the new clause in line with the new structure of government for London, and include a reference to the London Development Agency, which came out of legislation passed in the previous Parliament to establish the Greater London Authority and the Mayor for London.
	Let me now examine the genesis of the new clause, which began in Committee. In the evidence provided by Tom Simmons, the chief executive, reference was made to the various consultations that took place on the new legislation. The proposal came from the original discussions; I agree with the right hon. Member for North–West Hampshire (Sir G. Young) that it was contained within one of the petitioner's statements with regard to the extension of the vote based upon the individual workers being counted. However, I do not believe that the construction of the City of London Labour party was to deny the workers the right to a vote.
	The genesis of the new clause was not contained in any of the consultations that took place by the City of London corporation with the residents of the corporation area. There was none, and I do not believe that there has been any since then. In the evidence given to the Committee, Mr. McLeod—who was representing the City of London corporation—set out in detail the consultation arrangements that then took place.
	After the report went through the court of common council, there followed a period of extensive publicity and consultation. Mr. McLeod said that the proposals had received quite wide media coverage, but that the main thrust of the consultative effort was a publication called City View which, in a sense, was the corporation's own newspaper. Throughout those consultations, there was no reference to any debate on whether there should be a clause excluding Crown property. I certainly cannot find any reference to any discussion to a proposal to exclude the workers of Government Departments from participating in the discussions on the City corporation's government by allowing them to have a vote as part of being a qualifying body.
	Mr. McLeod said that 65,000 copies were directly circulated to residents, non-residents, voters on the voting lists and businesses within the City. Again, none of those copies or any future documents contained any reference to such a clause setting out the exclusions. It appears that there was some reference made in the court of common council on reports laid before them.
	Again, the clause was never referred to in any of our carry-over debates. There is an extensive list of the debates that have taken place throughout this process. I can find no reference in any of those discussions to this matter being raised. It was never included in any consultation document submitted to the Government. A list of documents and representations were presented to us at an earlier stage by the promoters; none of them includes a reference to the new clause.
	The precedent has been set that amendments such as this are tabled without consultation or reference, or at the last minute with little chance to table an alternative amendment.

Andrew Dismore: The intervention earlier from my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) has some force; perhaps I can put the point to my hon. Friend again. Why does he think that the new clause has been tabled in this way, bearing in mind the long history that he has outlined?

John McDonnell: I want to outline the genesis of the new clause and to try to reach an understanding of why it has been tabled so late. I am perplexed. Reference was made in Committee to setting out the exclusion order that the Department of the Environment, Transport and the Regions was suggesting. That reference was made to a Committee in 1999. It is now 2002; we received the new clause five days, or two parliamentary days, before this debate.
	The amendment was not referred to in the special report on the Bill that was presented to the House. If any members of the Committee concerned are present tonight, I would be happy to allow an intervention to allow them to confirm that it was; but it was not. That was reported on 21 April 1999 and presented as an agreed report on 15 June 1999.
	Paragraph 1 of the report explained clearly that the Committee had considered the Bill and found that the measures that it proposed were broadly justified in order to correct anomalies in the existing business franchise. There was no reference to exclusion orders for Government Departments in the report. Clearly, the Committee did not consider that the purpose of the report would be to outline the issues as set out. However, it is interesting that, in one of the discussions in the Committee, there was reference to the new clause being inspired by the DETR, and that officials themselves had called for the amendment to be put before the House in some form.

Diane Abbott: I am reluctant to interrupt my hon. Friend's flow, but why would DETR officials have been responsible for the genesis of the new clause?

John McDonnell: I shall come on to that matter shortly, because it is covered in the report.
	In the Committee, reference was made to the DETR having looked forward to tidying up the exclusion of Government Departments at some stage. I refer my hon. Friend to page 20 of the report of the Committee's consideration of the Bill. This became the issue of the Bank of England. It was argued that the Bank of England, as currently constituted, pays rates and would possibly have a vote. A member of the Committee asked whether the Bank of England paid rates, whether it would have votes and whether there would be a nomination. A witness to the Committee said:
	"I am advised that the Bank of England, at the moment, would be entitled to put somebody forward. I am also advised that we have been asked by the DETR to make a change in the Bill to deal with the Crown property. There has actually been a change in the law relating to Crown property as it was when we started out, so we are going to have to make a change to deal with that which would take the Bank of England outside."
	It is, therefore, clear where the original exclusion order came from.
	At no time during the debate on the Floor of the House was that matter referred to. We are now entering our fourth year of discussions on the Bill, and at no time during that period have we been told that that was the motivation behind the original clause 6. In fact, quite the reverse is the case. We were told nothing about the matter. The Committee may well have considered that it would be important to look at the Crown property issue, as it related to the Bank of England or to any other Government Department or agency located within the City of London corporation. I do not believe, however, that the Committee considered it important to extend the definition of the exclusion of Crown property by such a broad, sweeping amendment as new clause 1. The Committee's consideration of this part of the Bill is notable for its brevity. Its discussion about Crown property being excluded took up two paragraphs, and that was that.
	Let me express my worries about the new clause in relation to the old clause. This could be described as the Eddie George exclusion clause, because it is deliberately designed to exclude the Bank of England and other Government bodies. It is an attempt to exclude the very body to which the Government have entrusted large sections of the management of our economy, and a large remit in terms of the pursuit of corruption, financial mismanagement and the lack of probity in financial institutions. This measure excludes Government agencies such as the Bank of England and the office of the Director of Public Prosecutions from having any role in the City of London corporation's governance.

Kelvin Hopkins: I am very interested in what my hon. Friend has been saying in the last few minutes. I am unhappy about the voting proposal being based on the number of employees, although it is, perhaps, a tiny improvement on basing it on rateable value. I see a good argument for having Government employees and the employees of public bodies within the new arrangement as a leavening to ensure that the new body is much more broadly representative of the interests not just of the City of London but of the country as a whole. The City of London plays an important part in our economy, and it is right that there should be some Government involvement, and public employees would make a valuable contribution in that context.

John McDonnell: I must explain to my hon. Friend that I am still addressing new clause 1. There are another 30-odd amendments that I want to deal with in as much detail as I can because they are equally important. He is leaping ahead slightly in relation to my amendments (a) to (d) to new clause 1, which deal with some of the matters that he has raised.

Andrew Dismore: I can see why my hon. Friend suggests that my hon. Friend the Member for Luton, North (Mr. Hopkins) is leaping ahead on that matter, but I do not think that he is, because he is addressing the issue that goes to the heart of what the promoters amendments are about. Does this not reveal the internal contradictions of those amendments, in that they are trying to base a franchise on the number of workers—in which case, surely it is in the interest of every worker to be represented and not be disfranchised because of whom they work for—yet the workers do not get a vote at all because it is still the bosses who will get the vote?

John McDonnell: Exactly, but the point that I am trying to make is that this is not a naive new clause. It will divide public sector workers from private sector workers, and act as a figleaf so some bosses can say that they qualify for votes on the basis of their employees, but not if they are public sector employees. That is bizarre.

Diane Abbott: As my hon. Friend unrolls his remarkably succinct exposition of his objections to the new clause and amendments, I must intervene on the Eddie George exclusion clause. I am confounded and baffled by the institution of our highest paid public servant—a very great man—being excluded in this way. Will my hon. Friend speculate on whether this could be an underhand attack on that great man by the euro-fanatic institutions in the City, because of his recent wise pronouncement on our entry into the euro?

John McDonnell: I understand the closer working relationship that my hon. Friend has established with Eddie George over the years, and what she says is partly in line with my argument. This is not so much a conspiracy theory as a conspiracy proposition proven by fact. The new clause is not naive; it is a conspiracy. DETR officials have connived, either innocently or misguidedly, with the City corporation to exclude the Bank of England from having a role in the corporation.

Andrew MacKinlay: I am following the drift of my hon. Friend's argument. I find it deeply offensive that McDonald's has a vote, but beefeaters do not. Beefeaters attract people to the City, being a proud symbol of the City of London. They also have a view—they are articulate fellows, from my recollection—yet they will be unable to make any contribution to City government as employees, although the person in the burger bar will.

John McDonnell: Let me give another example. Arthur Andersen, the accountancy company, will have a vote—indeed, it will have more votes as a result of the proposed system—but the Bank of England will not have any.

Kelvin Hopkins: Will Arthur Andersen be representing the interests of what remains of Enron?

John McDonnell: It is interesting that Enron is not located in the City of London.

Mark Field: I am not a shareholder in Enron, although I hope to have the opportunity to say a few words as I have undertaken a certain amount of public consultation on this matter, as I promised to do in our debate on 15 November. Given the rate at which the hon. Gentleman is going through his notes, that might be difficult, however. As a matter of fact, Arthur Andersen may have some small sub-offices in the City of London, but most of its offices are based in the city of Westminster.

John McDonnell: That is helpful, because I have obtained from the House of Commons Library a list of the top 100 employing companies in the City of London corporation. I shall not read them all out, but my understanding is that Arthur Andersen and Company is located at 20, Old Bailey, London EC4M 7AN. It is listed here as a firm of accountants—although some would describe them otherwise—with 1,000 employees. I leave it to hon. Members to calculate how many votes that would create.

Mark Field: The company does, indeed, have some employees in the City, as I said in my previous intervention. The majority, however, are based in the Surrey street area, which is outside the boundaries of the City of London.

John McDonnell: I would be grateful if the hon. Gentleman would place on the record how many employees of Arthur Andersen and others are located within the area. Under the proposal that he may support if he does not support my amendments—although I shall be surprised if he does not do that—Andersen would, I think, gain one vote for the first five employees, 10 for the next lot up to 50, then one for every 50 after that. That could mean that Andersen would run the City of London corporation—indeed, it may well be doing so already.

Diane Abbott: On a point of order, Madam Deputy Speaker. Fortuitously, my hon. Friend has brought with him a list of the 100 top employers in the City, and as that is the electoral franchise that we are debating, would it be appropriate for him to read the names of those 100 companies into the record?

Madam Deputy Speaker: That is not a point of order but a matter for debate.

John McDonnell: I am tempted to do that, but instead I shall try to ensure that a copy of the list is laid before Members as soon as possible. I requested the list from the Library, and it was supplied by the corporation of London's economic development unit, which I thank for that information.

Andrew Dismore: This all goes back to the Eddie George exclusion clause. I am interested in the list that my hon. Friend has produced. Are there any foreign banks, especially state-owned foreign banks, on it? It would be bizarre if they had a vote in the City yet the Bank of England did not.

John McDonnell: What interests me is that the Bank of England, which is located in Threadneedle street, has 3,000 employees—so if it were given the right to vote rather than being excluded, it would be a significant voter for the City of London corporation.
	Let me read out a few names. I dare not even mention Barings bank, although it is located in the City. [Hon. Members: "Go on."] I shall not press the matter, but I would be grateful if one of my hon. Friends could find someone to photocopy the list.
	Let me go back to my argument on new clause 1, and why I think that it is an attempt to exclude the Bank of England. If the Bank of England had any sort of access to the governance of the City of London corporation, it would have a responsibility, or feel a sense of duty, to reach a more thorough understanding of the corporation's finances and management, and would investigate them.
	The new clause excludes the Bank of England from any role in examining the City of London's "City cash". That is the name of an account held by the City of London corporation, but the accounts are neither published nor audited by the district auditor. If the Bank of England were not excluded by this incredibly damaging new clause, surely Eddie George would want to bring to light the mysteries of the City cash.
	I raised the subject of the petition from Mr. Malcolm Matson in a point of order, because it was he who, in his excellent Fabian pamphlet of a few years ago, outlined the noxious basis on which the City is funded by the secret City cash. That is why we want Government Departments and the Bank of England involved in the governance of the City of London. We want to expose those secret sums, which, unlike any other local government funds or budgets, are not under the scrutiny of the district auditor.
	I received a letter on that subject from a Mr. Streeter, who pointed out the origins of the City cash, and explained why the new clause had been drafted to ensure that the Bank of England and others were excluded from participation.
	I shall give a small example. Some of the revenue income from the City cash—£1.2 million—is expended on feasting, and £250,000 was spent on a boardroom for the European Bank for Reconstruction and Development. The new clause was tabled to ensure that the Bank of England and others have no role.

Kelvin Hopkins: This may sound like a light matter, but there is a serious undertone.

John McDonnell: It is serious.

Kelvin Hopkins: My hon. Friend referred to feasting. I suppose that by that he means good meals. Just before I came into the Chamber, my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) told me that he recently had a very good dinner at the Mansion House. Is that the sort of dinner that is meant by feasting?

John McDonnell: Is my hon. Friend raising a matter of privilege on the Floor of the House? Is the City corporation wining and dining Members of Parliament to influence their votes? Surely not.

Mark Field: I am tempted not to respond every time, but, as I am sure that the hon. Gentleman knows, one of the ceremonial roles of the corporation of London, on behalf of the City—indeed, on behalf of the nation—is to stage dinners for state visits. Obviously those are expensive, but there is no doubt that they are also extremely useful in exporting the United Kingdom as an entity to the countries that the state visitors come from.
	Those dinners are not restricted to a small clique of individuals. In my capacity as a local MP I have attended two state dinners in the seven months since my election, and it was clear that many hundreds of people from all walks of life are invited—across the political divide, and from the business community throughout the United Kingdom. There is no doubt that the City of London performs a good ambassadorial role in that way.

John McDonnell: I have no doubt about the role that the City corporation plays in eating for Britain.

Andrew Dismore: Perhaps I should declare an interest, because a couple of years ago I went to a dinner. I think that it was for the judges, although I have not been invited back because I did not wear the right clothes. My hon. Friend may rest assured that that did not influence my approach—

Madam Deputy Speaker: Order. Interesting though this may be, we are moving away from the new clause.

John McDonnell: I agree, Madam Deputy Speaker. Like me, you have probably never been invited—or perhaps you have.
	Let me explain the role of the Bank of England. Would it have much authority or influence if the amendment to exclude it were rejected? I have outlined the top 100 companies, and the Bank of England, with 3,000 employees would have, according to my calculation—although I am open to correction—about 69 votes.
	That may not sound a considerable number elsewhere, but in the City of London it is. Judith Mayhew was elected chair of policy and resources in December 1998 with 27 votes, so we can see how 69 votes would be important in influencing the direction that the City of London corporation would take.
	Let us compare the old clause with the new. If the new clause were adopted, it would exclude a whole range of bodies, but if it were rejected it would allow a range of expertise—the Bank of England's economists, investigators and accountants—to set about the City of London corporation's creative accountants' abilities and abuse of power.
	Another body that the new clause would exclude is the Crown Prosecution Service, which is also located in the City of London. I do not have the list in front of me but from memory, the CPS has about 600 employees in its City of London offices, and I calculate that it would therefore qualify for about 16 votes. Why does the City of London corporation want to prevent the Crown Prosecution Service from having a role in its governance?
	The role would be only to nominate voters for elections to the City corporation. It would not necessarily mean serving on the body, only nomination. I am deeply suspicious—

Diane Abbott: As it happens, I have a copy of the list of the top 100 employers in the City in front of me, and it is true that the Crown Prosecution Service employs 600 people. Under the terms of the new clause that my hon. Friend is debating so ably, the CPS would not have a voice, yet sleazy institutions such as Arthur Andersen and all types of foreign-owned companies would.

John McDonnell: That is why I am deeply suspicious of the new clause. I am deeply suspicious of any organisation that seeks to promote a wide-ranging amendment to exclude from any dealings that it has with the outside world the very organisations that have the expertise to root out fraud and corruption, criminal activities, financial mismanagement and economic incompetence. I would have thought that any organisation would welcome the participation of those Government agencies.

Phil Sawford: My hon. Friend referred to the special report from the Committee, on which I served. The report says:
	"the electoral system within the City of London is flawed in a manner and to an extent which could not be addressed within the powers of the Bill presented."
	Does he think that the amendments make the Bill any better? He referred to the numbers of votes that the Bank of England and the CPS would have. We learned in Committee of three wards with no electors at all, so 69 votes could represent a bigger swing than I had in Kettering.

John McDonnell: I would not like to delve into the politics of Kettering, apart from commending the voters' good sense in electing my hon. Friend.
	The Committee was not alerted to the fact that excluding such bodies means that expertise within the City of London boundaries would be excluded from participation in the good governance of the City of London corporation.

Andrew Dismore: In his list of the bodies involved in enforcement, my hon. Friend missed out the judges in the Old Bailey and the other law courts in the City. The courts are very important institutions, and we all know how many City spivs have ended up in front of a judge at the Old Bailey. Does my hon. Friend agree that judges should also have a part to play?

John McDonnell: My hon. Friend and I clearly have differing views of judges and their ability. I am not sure whether the City of London corporation would benefit from the involvement of Old Bailey judges.

Andrew MacKinlay: Could my hon. Friend or the Minister throw any light on this point? I see that the Bill's promoter is not in the Chamber. [Interruption.] Mea culpa, mea culpa, mea maxima culpa. The right hon. Member for North-West Hampshire (Sir G. Young) crossed the Bar of the House a moment ago.
	I have read and re-read the new clause, which says:
	"A government department or other body exercising on behalf of the Crown functions conferred by or under any Act shall not be treated as a qualifying body".
	It appears that most of those employers, albeit private companies, have had conferred on them by an Act duties and responsibilities that they are fulfilling on behalf of the Crown. Perhaps the right hon. Gentleman can help, because that is nonsense; the new clause is sloppily drafted. A lot of people who think that they will get a vote will not if new clause 1 is accepted.

John McDonnell: My hon. Friend is about 20 pages ahead of me. I will come to that point in due course. This is a poor draft. The previous draft had some relevance because it was based on rateable value. Because the redrafting has been left to the last minute, it is very poor, and I would sack the parliamentary agents responsible.
	There is a contrast between the City of London corporation excluding certain bodies yet being desperately keen to extend to others a massive number of votes. It is a disgrace. We have mentioned some of those who will gain if the new clause is accepted. There is a lack of balance. Certain bodies that could root out fraud and corruption would be excluded while others, including Arthur Andersen and Barings, which have been associated with unacceptable practices, would be given additional votes. I am staggered that firms would be extended wider voting rights or could maintain existing voting rights while bodies that are legally respected and supported in many ways by the Government and both sides of the House for their probity would be excluded.

George Young: The hon. Gentleman will be relieved to hear that the Bank of England would not be excluded under new clause 1.

John McDonnell: That is interesting. The import of the report was that it would be excluded. That makes the draft even worse. Are we saying that the Bank of England is not a
	"body exercising on behalf of the Crown functions conferred by or under any Act"?
	The Bank of England is formally constituted; it exercises functions under the Bank of England Act 1998. I think that the right hon. Gentleman is seeking to confuse the House because that is inaccurate, although he may not be doing so deliberately. I ask him, because he has introduced such an element of confusion into the debate, to withdraw the Bill, seek legal advice and publish it. I say that with the greatest respect because we all hold him in deep affection—[Interruption.] All right, affection. Our confidence in him as an interpreter of legislation has been undermined by that statement. I am amazed that he should tell me that the Bank of England is not a
	"body exercising on behalf of the Crown functions conferred by or under any Act".
	I am happy to seek legal opinion on that statement, to be paid for by the City of London corporation.

Alan Simpson: At some stage, I hope that my hon. Friend will reflect on the verification of the numbers ascribed to each of the major employers in the City of London. It is difficult to know where those numbers were conjured up from. The Labour party has had its own experience of verification of the block vote being an important aspect of democratic accountability. We are in danger of seeing the reintroduction of the block vote, in this case for the City of London.

Madam Deputy Speaker: Order. Mr. John McDonnell.

John McDonnell: I invite my hon. Friend to expand on that point at a later date, because it is an invaluable contribution to the debate.
	Under the old clause, exclusion was based on property or rateable value—the hereditament—as against the qualifying body status based on the definition of a body corporate or an unincorporated body other than a partnership. Is the new clause superfluous? I am unsure whether a Department can be defined as a body corporate or an unincorporated body. Perhaps the right hon. Member for North–West Hampshire will clarify that point. It may be relevant and required if we are seeking to bar from qualifying body status all those bodies and agencies that exercise functions on behalf of the Crown but that are not Departments. There is a breadth in the new clause. In passing, I wish that we could amend the legislation by referring to Government functions rather than Crown functions, which are a Bagehotian fiction.
	The complexity that exists today in defining the scope of Crown exclusions, which has never existed in the past, arises from the reform, over several decades, of how Government perform their functions. The complexity, which has ensnared the new clause, is based on the devolution of Government functions to agencies and other bodies, including private companies. That is the point that my hon. Friend the Member for Thurrock (Andrew Mackinlay) raised. Government is no longer so simple that we can draft a new clause that is all-encompassing yet at the same time restrictive.

Kelvin Hopkins: I have a very simple approach to words—I read what they say. The new clause refers to
	"exercising on behalf of the Crown functions conferred by or under any Act".
	Some four years ago, along with other right hon. and hon. Members, I voted through the Bank of England Act 1998. It conferred specific responsibilities on the Bank of England in relation to interest rates and inflation. I cannot see how that can be separated from the new clause.

John McDonnell: May I refresh my hon. Friend's memory? I think that we voted against the measure.
	The new clause would exclude any body from exercising functions allocated by the Crown under legislation. The delivery of Government functions is complex and I shall offer some examples that might be caught by the provision.

Andrew Dismore: Before my hon. Friend gives those examples, may I ask him to speculate on the case of people who work for London Underground? The legislation on London Underground is incredibly complex and is something of a moveable feast, depending on whether the public-private partnership goes ahead, whether the company should be transferred to Transport for London or whether it retains its current status— in effect as a Government function. Will London Underground workers move in and out of the franchise?

John McDonnell: That is a good point. It relates to one of my two examples—the other is Railtrack. The case of London Underground is more complex because of the nature of the public-private partnership that the Government want to impose on the people of London.
	British Rail was established by statute and exercised its functions on behalf of the Government and would thus be caught by the provision. Railtrack is a private company but it exercises functions on behalf of the Government, so is it caught? What is Railtrack now that the Secretary of State has taken control of the company? Is it a public body or a private body? Is it caught by the provision or is it excluded?
	The clause is a minefield because it is so badly drafted. Let us consider London Underground where there is that interesting moveable feast. If the PPP is established and takes over sections of the underground, the companies participating in the PPP constitute bodies corporate exercising functions on behalf of the Government under legislation and could thus argue that they are caught by the provision. However, some parts of those companies will exercise other functions—as is normal in private companies—so how much of the company will be caught by the provision?
	Will workers engaged in the PPP work of a company be excluded while workers who serve other interests in the same company escape the provision and thus be counted in the allocation of votes for the City of London corporation? The complexities of that exclusion call for significant amendment.

Diane Abbott: I do not want my hon. Friend to lose his thread but does he agree that the exclusions are even more glaring and byzantine when we consider who is included? The biggest single employer in the City of London is Merrill Lynch—a US-owned company. Lloyd's of London is also included. That company was a very cesspit of corruption in the '80s. The starving widows and orphans of former Lloyd's names can tell the tale, although I do not want to get into a discussion of what happened at Lloyd's in the '80s.
	Another organisation that would be included under the new clause is Bloomberg, so a financial institution owned by the mayor of New York would have more say in the governance of the City than our own Eddie George who is as British as roast beef.

John McDonnell: The issue is well rehearsed. We are disputing those exclusions. Labour Members consider that there are established bodies—corporate or unincorporated—that exercise Government functions and have thus been excluded. There is an element of confusion among Opposition Members. May I suggest that the way forward would be for the Bill's promoters to produce a legal opinion that can be tested by the House and by independent legal advice? The amendment has put us in a quagmire of confusion.

Andrew Dismore: In relation to London Underground, there is a problem arising from the removal of the word "hereditament" and the reinsertion of the word "premises". We are probably on common ground if we say that a tube tunnel is not a hereditament but it is certainly a premises. Will tube drivers be included for part of the time—while they are in tunnels—because they would be working in premises in the City?

John McDonnell: That is a novel concept.
	I have another serious example. A number of my constituents pass my way only once a year—they are travellers. They operate as a business. Will they qualify under the provision on a particular day if they are in a particular area? It is bizarre.

Hugh Robertson: Does the hon. Gentleman agree that the reason that many foreign firms are in the City is precisely because the City is such a successful international financial centre? Many of those firms own British companies; for example, Merrill Lynch bought Mercury Asset Management—a well-known British firm. Such firms are in the City because of its success and because of the contribution that it makes to the UK economy. We are lucky to have so many of them in this country.

John McDonnell: The hon. Gentleman has fallen into the same trap that caught many Members when we first considered the Bill in 1998. I do not blame him for that. There is conflation between the City of London corporation and the City. One is a group of masonic diners; the other is a group of organisations and companies that earn much of the wealth of this country in a particular field of activity. I hope that the hon. Gentleman can make that distinction in future. We are debating not the future of the City and its financial institutions, but the governance of the City of London area which is not properly exercised because it is not representative.

Mark Field: Just as it would be crass to suggest that the City of London and the corporation are intertwined and are one and the same—an argument that no Conservative Member would make—so it is unfair to suggest that the corporation has no part to play. Some of the corporation's leading lights play a large role on the international stage. They travel worldwide; for example, Judith Mayhew, who is head of policy and resources, spends much of her time abroad. The Lord Mayor has an enormously busy diary, representing the City of London and the corporation abroad where he tries to get as much business as possible. Indeed, several of the common council men—

Madam Deputy Speaker: Order. I remind all hon. Members that interventions must be brief.

John McDonnell: I understand the point that the hon. Member for Cities of London and Westminster (Mr. Field) was making. Most of us have much respect for individual members of the corporation, especially progressive members such as Judith Mayhew. Indeed, a couple of years ago, in this place, I invited her to join the Labour party because of the progressive work that she was doing at the corporation. Unfortunately, she cannot constrain the freemason backwoodsmen who currently populate most of the City of London corporation. That is why we need definite reform.

Jeremy Corbyn: Will my hon. Friend confirm what I believe to be the case from the intervention made by the hon. Member for Cities of London and Westminster (Mr. Field) that the City corporation is the only the local government body anywhere in Europe that has direct business representation on it and proposes to extend the franchise to business? No other successful or unsuccessful city in the world has that kind of curious relationship with a limited number of financial institutions.

John McDonnell: I confirm that that is true, but it would have been incredibly helpful and reassuring if the City corporation had accepted an amendment that my hon. Friend tabled previously, under which there would have been a declaration of interest involving the membership of freemasonry lodges by City corporation members.

Diane Abbott: With reference to an earlier point, it is significant that, when an hon. Member has to cast his mind about for a singularly intelligent and forward- thinking member of the City government, the first name that comes to mind is that of a woman who was born in the antipodes. The fact is that 99 per cent. of the City corporation's role is as a freemasons' diner.

John McDonnell: If I can move on—

Mark Field: rose—

John McDonnell: If the hon. Gentleman wants to rise to that, I shall not stop him.

Mark Field: I rise only to say that the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) makes my point for me in a way. In any other council in the country, Judith Mayhew would be commonly called the leader of the council, so it was obvious that I would refer to her involvement and her great contribution to corporation and City affairs.

Andrew Dismore: rose—

John McDonnell: I want to finish my last point on new clause 1 before moving on to the amendments that I have tabled. I want to put on the record very clearly the fact that we need wider instruction, debate and legal advice on the matter because new clause 1 would muddy the waters about what is excluded and what is not excluded. It does not relate to modern government.
	I shall briefly explain the history of the problem. In earlier times, Crown property was excluded because it was owned by Departments, and Departments were the only bodies that exercised Crown functions. Before the second world war, several boards were established, which confused matters, so the definition of Crown exclusion was extended to those boards. After the second world war, the waters were muddied even further by the introduction of nationalised industries, so Crown exclusion was extended to them. But that has all changed now.
	Under the Thatcher Government, privatisation, devolution, the establishment of agencies, the proliferation of quangos and the development of semi-autonomous bodies, the definition of Crown exclusion had not kept pace with government. That is the problem with new clause 1. In the 1980s, that delegation of functions was so vast that a proper debate on Crown exclusion needed to take place, and I am afraid that the Bill has been hoist on that petard. New clause 1 is confused and does not relate to the modern world of the delivery of government.

Andrew Dismore: No doubt my hon. Friend will recall the continuous line of cases in which it was decided that the national health service is a Crown body, so all the NHS workers in the City would be excluded, but those who work in private hospitals presumably would not. Is that equitable?

John McDonnell: I am trying to make exactly that point, and it is exactly the problem that I am trying to redress in my amendments. I should like now to move on to the amendments that I have tabled.

Diane Abbott: To illustrate that point, the workers at Moorfields eye hospital—all 900 of whom are hard- working and devoted City workers—would not have a say, but employees, such as stock jobbers and those of foreign-owned banks would.

John McDonnell: Exactly. My hon. Friend makes a valid point. Some hon. Members wish to denigrate public sector workers and to exclude them from the calculation yet again.

Mark Field: There is a reason why the employees at Moorfields eye hospital would not qualify—it is not based in the City of London.

John McDonnell: Unfortunately, that hospital is on the list supplied to us by the City of London corporation, and I can provide the hon. Gentleman with a copy of that list in due course.

Kelvin Hopkins: This point was made a few minutes ago, and I have wanted to intervene since then, so I am grateful to my hon. Friend for giving way. The hon. Member for Cities of London and Westminster (Mr. Field) seemed to suggest that, because the Mayor of London does good ambassadorial work for the City of London elsewhere, we should accept an essentially undemocratic form of governance in the City of London. All over the world in democratic countries, mayors are generally elected by democratic, universal suffrage. Why should the City of London be an exception?

John McDonnell: That is useful precedent—I have tried to argue in Hayes and Harlington that there is no need for elections and to install me for life. New clause 1 needs to be rewritten.

Alan Simpson: May I ask my hon. Friend to clarify the assertion that was made by the hon. Member for Cities of London and Westminster (Mr. Field)—that the reason why the staff at Moorfields eye hospital would not be entitled to vote is that they are not part of the City of London? If my hon. Friend looks at the list of firms and institutions that operate in the City, he will be able to confirm that Moorfields eye hospital is, in fact, listed as operating in the City and employing 900 staff within its remit.

John McDonnell: New clause 1 will exclude those Government Departments, agencies or bodies carrying out Government functions. In answer to a query, the House of Commons Library gave me the following response:
	"As requested, a list of the largest 100 companies in the City of London, by employment, supplied by the Corporation of London economic development unit".
	There is a reference to using the document with care because the number of employees has not been updated. It may be a mistake by the corporation, which is hardly surprising given its accountancy techniques.
	New clause 1 needs to be rewritten and redrafted. My amendments would do that, and I want to explain the meat of them. I accept that, even if my amendments are accepted, the new clause will result in a field day for the lawyers of the many bodies that exercise Government functions in some form, but which are not governmental bodies themselves. Challenges will be made.
	A class of bodies exists that has a status that is something between governmental and non-governmental organisations. I suggest a nomenclature of semi- autonomous bodies—SABs. Amendment (a) would deal with that group of organisations and it would delete from new clause 1 the words
	"or other body exercising on behalf of the Crown functions conferred by or under any Act".
	That means that only Government Departments would be excluded from the right to be described as qualifying bodies, and thus nominate voters in City of London corporation elections.
	The amendment is a compromise. If a Government Department is located in the City, that Department and its workers should have every right to a say in key issues affecting the working environment. However, they are excluded under the new clause. Why should those Department employees be so excluded? It demonstrates yet again a form of discrimination against the public sector and public sector workers. Why do some Conservative Members continue to amend legislation in such an anti-public sector fashion? Amendments (a) to (e) would redress that wrong.

James Gray: Is the hon. Gentleman not aware that 300 nurses who live in Bart's hospital are included in the City's franchise?

John McDonnell: They are included as residents, but they would not be included within the franchise as workers. The bulk of people who work in the public sector within the City corporation boundaries would be excluded.

Andrew MacKinlay: Surely it is because none of those 300 workers has any chance of becoming Lord Mayor. That is the rub, whether under the existing arrangements or this monstrosity of a Bill. The hon. Member for North Wiltshire (Mr. Gray) seems to think that it is outrageous that such a person might be entitled to become Lord Mayor.

John McDonnell: It would be fantastical were any worker elected as Lord Mayor under the current arrangements. We have yet to see an example of a worker leading the City of London corporation.

Andrew Dismore: I want to follow the point made by the hon. Member for North Wiltshire. If, as he says, the nurses to whom he referred have a vote as residents—although I think that he is wrong—they would also have a vote, albeit indirect, as workers. In effect, they would have two votes. What kind of democracy is that?

John McDonnell: It is a bizarre democracy. That is why this new clause is so anomalous.

Diane Abbott: My hon. Friend observed in his lucid and concise speech that there has been no example of a worker becoming Lord Mayor. Is there an example of someone becoming Lord Mayor who was not a freemason?

Alan Simpson: Or a millionaire.

John McDonnell: Indeed—or a millionaire. It is difficult to determine because of the refusal by City of London members to accept the introduction of a declaration of freemasonry.

Andrew MacKinlay: Just like Opus Dei.

John McDonnell: I agree that there should be a similar registration for Opus Dei.
	I asked why Government Department employees should be excluded from the franchise. If this is a radical and reforming Bill, as has been proposed in other places, to extend the franchise on the basis of the number of workers, why are public sector workers discriminated against? Amendments (a) to (e) would at least introduce increased inclusivity, and less exclusivity.
	I accept that amendment (e) has not been called, but amendments (a) to (d) have. Even without amendment (e), there is an argument in favour of amendment (a). If a Department is located in the City, it should have every right to participate in the governance of the area, but the new clause would bar Ministers and permanent secretaries from participating and voting for members of the City of London corporation. So it keeps Stephen Byers and Gordon Brown out of the corporation's governance. I do not however want to comment on that.
	Amendment (a) would soften the harshness of the dictum of the new clause and would allow all those bodies—public, private and public-private partnerships—to participate in the governance of the City corporation area in which they are located and have a work force, even though they may be carrying out some functions of the Crown bestowed on them in legislation by the House. Not to accept amendment (a) would be an affront to the House. Parliament has passed legislation to confer functions on a body and has expressed its confidence in it. I would expect no new clause or subsequent amendment to undermine the confidence that the House has in such a body.
	Without the amendment, the new clause signals that although we have faith in a body to do what is in some cases our dirty work, we do not have sufficient faith in it to participate in the governance of the area in which it is located. However, we do have sufficient confidence in private companies that we have not entrusted with public duties and functions. In some instances, we would have to distinguish between private companies that operate under legislation and private companies that do not, and we will discriminate against those in which we have expressed confidence by bestowing contracts on them.
	There is another anomaly to consider. Does the new clause bar the many private companies that we have entrusted to carry out the statutory functions of the district auditor from participating in the governance of the City corporation? A number of accountancy bodies in the list of the top 100 companies operate and bid for contracts as district auditors in local government. They would be caught by the exclusions in the new clause because they exercise functions as bodies corporate on the basis of legislation and of the powers conferred on them. The new clause is tantamount to saying that we have confidence in companies that operate as district auditors in local government, but that they cannot participate in the governance of the City corporation.

Andrew Dismore: I see that Deloitte and Touche is on the list, the auditors in which the excellent Mr. John Magill was a senior partner. He was instrumental in exposing the scandal at Westminster council of Dame Shirley Porter gerrymandering homes for votes.

John McDonnell: It is a bizarre commentary on the new clause that the very people who have exposed corruption in local government would be caught by its terms and refused a role in the governance of the City corporation. Perhaps it is a fear—again, I relate this to the City cash—that if such bodies participate in the governance of the City of London they would expose some of those issues to daylight as a result of functions exercised on behalf of the Crown.

Kelvin Hopkins: The amendments, which I, too, have tabled, are an attempt at least to improve the new clause. However, I would prefer to go further and delete it entirely. If all employees and organisations were included there would be no need to have a distinction and the lawyers would not have a field day. On reflection, does my hon. Friend think that we have gone far enough?

John McDonnell: To be honest, my amendments attempt to make the new clause work, but I am struggling. I agree with my hon. Friend. Without amendment (a), a vista of legal challenges will follow by bodies that are exercising Government functions and are excluded.

Andrew Dismore: My hon. Friend makes an important point about legal challenges. The City includes the Temple, and barristers sometimes work for the Government—effectively exercising a government function in defending the Government in cases of judicial review—and sometimes for the other side. How would my hon. Friend's analysis accommodate the position of a barrister defending the Government in a judicial review who was suddenly asked to prosecute a judicial review concerning the interpretation of this very legislation?

John McDonnell: My view is that the lawyers affected would be those who participate in challenges to the enactment of the Bill. They would be denied the human right of participation in the governance of their area on the basis of a spurious clause that tries to exclude them from engaging in a practice in which they pursue their living. I find that extraordinary.
	I turn now to amendment (b), in my name. In case amendment (a) is too sweeping and would allow too great an extension to bodies linked to central Government, I have offered the House another amendment. It would limit and better define the impact of new clause 1, but maintain some flexibility. I request now, Madam Deputy Speaker, that when we come to vote, the amendments be voted on separately because they present alternatives to one another. However, I realise that if those votes are allowed, they will not take place until after we have discussed the next group of amendments.
	Amendment (b) would insert the words "government appointed" into the new clause, so that it would read:
	"A government department or other government appointed body exercising on behalf of the Crown functions conferred by or under any Act shall not be treated as a qualifying body within the meaning of this Act."
	The aim is to limit the range of the new clause. I tabled the amendment in a spirit of compromise and clarity. It would enable the new clause to exclude Government Departments and bodies whose boards were directly Government-appointed. It is an attack on cronyism in line with the attacks on the Government by the Leader of the Opposition. I agree that there is an important part of the Bill that we need to consider, and I think that we will reject the concept of boards packed with Government- appointed cronies participating in the governance of the City corporation. It will be tempting to Members of all parties.

Andrew Dismore: I see what my hon. Friend is trying to do but I am not sure that his amendment would achieve that, since it does not say "directly appointed". My concern is that the new clause could exclude those who are vicariously appointed, and that would apply to NHS workers. There is no doubt that NHS boards are appointed by the Government and the boards appoint their staff, but those staff could be excluded.

John McDonnell: I offer the amendments as options on a sliding scale of impact and compromise, and I ask my hon. Friend to take amendment (b) in that spirit.

Diane Abbott: I have listened with care to my hon. Friend's succinct and carefully marshalled arguments, and the whole House is united in its admiration for the spirit of compromise in which he has tabled the amendments. Does he agree, however, that given the gaping holes already emerging in the Bill, it is not too late for the promoters to withdraw and redraft it?

John McDonnell: I hope that as a result of the debate, if my amendments are carried, we will have a better Bill, but it will not be a good Bill. It should be withdrawn, and legal advice should be sought about some of the comments made by Conservative Members, because they are now in dispute. I urge all Officers of the House to examine the Bill with regard to the point made by Mr. Matson, the petitioner. The Bill is complex and it is so different from the original draft that it should go back to Committee for examination.

Phil Sawford: I served on the Committee that considered the Bill over five or six days. We were informed from the outset that we could work only within the parameters of the Bill presented to us. The special report says that
	"the Committee could only consider the Bill on its own merits, and . . . the wider reforms discussed could not be a matter for its formal consideration or jurisdiction".
	The matters that we are discussing this evening—my hon. Friend's serious concerns—were never subject to scrutiny. This is a completely different Bill. My hon. Friend suggested earlier that it should begin its passage again because the very first amendment, new clause 1, deals with matters that were never considered in Committee.

John McDonnell: I agree wholeheartedly. Although clause 6 of the original Bill, which includes the exclusion of Crown property, was considered in Committee, we are not now excluding Crown property; we are excluding people. We are excluding Government Departments and their employees—individuals. If this were a Government Bill, individuals would be able to claim that it was a hybrid Bill; it would go through the procedure that is now prescribed for private Bills, as we have just determined, and the Government would be forced to announce changes at the earliest opportunity. The changes that we are discussing were never announced.

Alan Simpson: I am grateful for my hon. Friend's analysis, but does he accept the point made by our hon. Friend the Member for Kettering (Phil Sawford)—that the excluded are not only those who are workers in parts of the institutions operating in the City, but those who currently have rights as residents in the City? They have locus standi to object, and they objected to the Bill when it was first presented. Unless they have the right to—

Madam Deputy Speaker: Order.

John McDonnell: That was indeed a long intervention.
	Let me be clear: there are now issues in relation to which the clause is the key to the whole Bill. The clause becomes essential to the future of the Bill, which is why I spent some time on it, but there are 30 amendments of equal import that we need to discuss tonight. The Bill is falling apart before us, which makes a reference back to Committee critical. That is no jest—the Bill needs proper examination. We are falling into the trap of making poor legislation.
	The amendment tackles the issue of appointed boards. I accept that there is a problem of allowing Government- appointed boards to have a role in the City corporation; therefore the amendment is designed to ensure that those who, because of their direct Government patronage, owe allegiance to central Government are not allowed to participate in the governance of the City corporation, or exert an influence as a result of that patronage on the City corporation in its elections. Amendment (b) limits the exclusion order in new clause 1 by deliberately not encompassing those bodies that exercise Government or statutory functions, but are not directly appointed by the Government.
	Would a state school fall within the remit of new clause 1? If my amendment were accepted, it would not, because the board of governors is not directly appointed by the Government. However, under new clause 1 alone, it would be, because it carries out a function under legislation. The new clause must be re-examined, and my amendments enable us to consider how to ensure that the Bill will work. I do not want schools or health bodies that can participate in the good governance of the City corporation to be excluded. They should be represented.
	I am sure that within the City corporation are many arts or charitable bodies that undertake Government functions.

Kelvin Hopkins: My hon. Friend knows that I am deeply unhappy about the undemocratic nature of the proposals. However, if the other bodies that he has just mentioned were included, it would bring a little pluralist competition and balance to the arrangements. From time to time, countervailing voices might be heard, instead of only the commercial voice of business.

John McDonnell: That is true. Ameliorating the effects of the clause would enable that variety of voices to be heard.
	Many long-established charitable bodies now carry out Government functions: for example, the London Community Foundation now administers the children's fund, which was established by statute, throughout London. Unless my amendments, especially amendment (b), are accepted, such bodies, whose boards are not directly appointed and are therefore independent, but which carry out Government functions, would be excluded.

Andrew Dismore: Will my hon. Friend explore the argument about arts bodies? At the Barbican are all sorts of bodies that receive central Government funding: for example, the Royal Shakespeare Company receives substantial sums from the Government through various arts bodies. How does he envisage their being affected by either new clause 1 or his amendments, bearing in mind the direct and indirect relationships we have been discussing?

John McDonnell: My amendments give the option to ensure that such bodies—I do not believe that the Barbican is so caught because it is exercising a function under the City corporation and is funded in that way, so I do not think that it is exercising a Government function—address the general issue of providing more flexibility.
	Amendment (d) has been alluded to by the right hon. Member for North-West Hampshire, the promoter, and I believe that it provides the maximum flexibility. However, it is necessary to have confidence in government to endorse it.

Andrew MacKinlay: I left the Chamber recently to clarify the position of the Temple and the Inns of Court with the Library. I note that the Temple church and the master's house are held in common. Otherwise, each inn has its own hall. Can my hon. Friend throw any light on whether they are enfranchised under the proposed legislation? More importantly, does each set of chambers have a vote? To me, as a layman, we are talking in that context about a business, but probably that is not the correct status. Perhaps there is a legitimate interest, but what are the limits? If my hon. Friend cannot throw light on these questions, I hope that the issues will be flagged up by the hon. Member for Cities of London and Westminster (Mr. Field), when he has a go.

John McDonnell: It would be invaluable—I shall give way to an intervention on this matter for an undertaking—if the impact of the Bill were to be modelled for us. In other words, it would be invaluable if we were given exemplifications of what would be excluded and what would not. It was the Committee's role to examine the model and ascertain whether it worked. However, the Bill has been so dramatically changed that the model has not been presented to anyone. The situation is rather like that of the person who understood the origins of the Schleswig-Holstein question. Lunacy is beginning to enter into the debate.
	Amendment (d) would provide the maximum flexibility but it requires confidence in government. It would allow the Secretary of State to determine what is "a qualifying body". Why is that important? The amendment would overcome some of the issues that have been raised so far. The right hon. Member for North-West Hampshire suggested that the amendment was an iniquitous measure that would give power to the Secretary of State to intervene. I believe that it would introduce flexibility and accountability.
	The amendment would provide that a body—a Government Department or anyone exercising the functions—would not be treated as a qualifying body
	"unless it has been declared by the Secretary of State to be a qualifying body".
	In other words, a Secretary of State could designate a school or hospital outside the exclusion. In that way, the Secretary of State would have the power to ensure that responsible bodies were not excluded. That would enable him or her to exercise such discretion when they saw fit. It would also provide accountability to the House. In this context, it would be the first stage of accountability to the House.

Kelvin Hopkins: I strongly support my hon. Friend's most recent point about the Secretary of State's involvement. I would reinforce it by saying that the amendment at least brings government into the picture, to an extent. Without such involvement, the new arrangements would create a City of London that would be rather like Monaco or San Marino, or some such semi-independent state surrounded by a major country. The degree of independence would be unacceptable in a unitary democratic state of the sort in which we live.

John McDonnell: The point behind such flexibility is that it acknowledges that governance changes over time. As agencies change and are established in the exercise of government functions, the Secretary of State would be able to identify whether they could be appropriately excluded from new clause 1. In that way, we would gain flexibility. For example, the involvement of the Bank of England in the governance of the City of London may well be worth while for a limited period to enable its finances to be sorted out, but after that, not; the Secretary of State could therefore designate it as not excluded by the court.

Andrew Dismore: Initially, I was taken by amendment (d). However, suppose in a far-off scenario that the Labour party is no longer in control and an extremely centralising Conservative party is in office. Could not the Secretary of State declare his own Department a qualifying body, and would that not lead to the danger of central Government being directly involved in local government?

John McDonnell: That is exactly why I said that the amendment needs a leap of faith from the Government. The Secretary of State could designate his Department, or numerous Departments, as outside the exclusion order so that they could participate.
	The Secretary of State may wish to put certain matters on the agenda of the City of London corporation, including corporate governance and financial reform, so he would want to determine that certain Departments and Government agencies are not excluded and are qualifying bodies. That would give any Secretary of State the opportunity to influence the governance of the corporation and move it towards a reform agenda; virtually every other power that has been exercised to encourage the corporation to reform has failed. The amendment therefore provides an opportunity to introduce good governance in the corporation.
	It is true that certain pressures could be applied, but that would be done openly through the electoral process, rather than through secret meetings and behind-the-scenes pressures, which Governments and Secretaries of State have applied in the past. To take the example of the City cash, a Secretary of State could designate Departments to influence the corporation's governance and introduce reforms. There are immense opportunities for any legislation to be hindered, delayed or even defeated by either House of Parliament. The Lords, who have often populated the City of London corporation—many of them serve as its aldermen—seek to block the legislation that we are trying to impose on the corporation, so we may well want Secretaries of State to have influence at the grass roots, which would welcome instigated reform, rather than reform from above.
	My amendment would allow the Government, via the Secretary of State, to designate a range of Departments, Government agencies and bodies as qualifying bodies, enabling them to nominate voters who in turn can vote for a slate of reforming representatives to tackle any issue on which the corporation backwoodsmen remain intransigent. The amendment is therefore powerful; it may be a tortuous route, but such a power may be useful in future. I urge that it should receive consideration, and not be given up, underestimated, turned away or rejected lightly. It does not propose an abuse of power, but its proper exercise. Even without a big bang confrontation, it may well be best to give the Secretary of State flexible powers to define or designate a qualifying body.
	There is considerable uncertainty about the changing structures of the Government and the bodies that they set up, or on which they rely, to deliver the functions that they perform under statute. The amendment would give the Secretary of State discretion and, in doing so, would prevent legal challenges—or at least provide a mechanism to minimise them—to the status of Government-linked bodies in future.
	Amendment (c) would insert the words
	"or any institution of the European Union"
	in the Bill. It seeks to prevent any EU institutions having a direct role in the governance of the City of London. That matter was raised in Committee; I refer Members to page 20 of the Committee report for 5 May 1999. The argument went that European Union bodies were exempt from paying rates and paid a contribution in lieu of rates, so did not appear on the rating list and did not qualify to vote. That was a delicate and diplomatic way of excluding European institutions, but it did not prevent the European Bank for Reconstruction and Development from securing £1.2 million for refurbishment of its City offices. When the system of voting is based no longer on property but on employees, the fine argument that European institutions are thus barred is not tenable. The further argument, advanced on the Floor of the House, that currently there are no European Union bodies in the City of London area, bears some examination. Even if there are none at present, there could be some in future.
	It could be argued that EU institutions are exercising functions on the Crown's behalf, as conferred by legislation such as the Maastricht treaty et al.

Kelvin Hopkins: My hon. Friend and I number among those who are concerned about Britain's future in the European Union. Indeed, there is something of a competition between the eurozone and the City of London in pursuing business in the financial world. If we are not careful, EU influence in the City could prove unhelpful to our economy and to the City's future success.

John McDonnell: Because of the confusion arising from the move from rateable value to voting on the basis of employees, the legislation could enable EU institutions to set up bodies in the City of London area and thereby exert an influence. I find that amazing.
	I do not want to stir up the European debate, but, at various stages, the hon. Member for Rochford and Southend, East (Sir Teddy Taylor) has edged towards me in the Tea Room. It is worrying, nevertheless, that there is no such specific exclusion of EU institutions.
	My amendment makes explicit what might not be sufficiently clear in new clause 1—that EU institutions are not entitled to participate in the governance of the City of London corporation. It could be argued that the new clause already excludes such participation, but I do not accept that. I do not believe that many such institutions can be regarded as Departments—certainly not of this sovereign Government. Moreover, they exercise not Crown functions but EU functions. My amendment makes the matter explicit by excluding those institutions, and I urge hon. Members to support it.

Andrew Dismore: Will my hon. Friend comment on the position of European Economic Area bodies, which are not EU bodies per se, but can play an important role in economic and financial affairs?

John McDonnell: My amendment would ensure exclusion of their participation in the governance of the City of London corporation. There might be an argument that those receiving EU funds are exercising—albeit tenuously—functions of government conferred on them by previous legislation passed by this House. My amendment makes it explicit that they would not so participate.

Phil Sawford: The point of the amendments is to focus on people rather than premises. I might be sympathetic to my hon. Friend's views on Europe, but would not the amendment exclude from the franchise British citizens who do a good, honest day's work in the City of London? Although there might be a conflict of interest in that regard, I am not sure that we can justify excluding such people from the vote.

John McDonnell: That is a valid issue to raise at this point, but unless my amendments are adopted and we accept the principle of balloting the work force, those workers will be excluded anyway. Amendment (e) would have addressed that issue, but it was not selected and therefore is not open for debate.
	The amendments that we are discussing demonstrate the importance of ensuring that the new clause is clear. There is a wide range of arguments in favour of democratising, and to some extent constraining, this power. They go to the heart of the Bill, but the fundamental question in all the amendments is who should be eligible to vote in the governance of the City of London corporation. If, like me, hon. Members believe in universal suffrage, they will support a number of the amendments that I am coming to, which would provide for ballots rather than appointments.
	The basis of universal suffrage has always been one person, one vote. If hon. Members believe in universal suffrage, they should support any extension of suffrage beyond the residential and oppose those who seek to build votes on names of workers rather than giving them a ballot. If, in the spirit of compromise, they want a negotiated settlement between all the combatants in the dispute over the City corporation franchise, like me they should be willing to examine as many compromise options as possible. The Bill, if amended as many of us wish it to be, could be a decisive agreement on the future franchise of the City corporation, and would decommission some of the corrupt practices that have gone on.
	The compromise that I have repeatedly suggested is based on mutual esteem, as set out in my amendments. It recognises that all the stakeholders in the City corporation should have a say in the democratic structures and procedures of their area. At present, there are limited rights for residents, for some businesses and for a group of elected-for-life aldermen, but there are no rights for the workers of the City, who create the wealth on which the City relies and of which it extols the virtues. In our amendments, we seek to install that right.
	New clause 1 unamended would exclude the public sector from participating in the democratic processes of the City corporation, and would prevent that sector from having any effective say. If we are successful in introducing a ballot of workers in the exercise of the franchise based on the numbers of workers employed by each company, unless we amend new clause 1 we will exclude the public sector. That would prevent the people who work in the public sector and provide such valuable services from making a valid contribution to City governance.
	If we extend the franchise based on employment, and amend the democratic processes of the City corporation, we will create a divide between public sector employees who, by being employed by bodies excluded under new clause 1, will have no participatory rights, and private sector employees, whose employment will gain them the right to vote, or at least the right to be counted. That cannot be acceptable.
	Under clause 4, a qualifying body is entitled to appoint a number of persons and ensure that they reflect the composition of the work force, so the City of London corporation moved some way towards reflecting the work force, although not in a ballot. However, that is not so for public sector workers.

Andrew Dismore: My hon. Friend talked about involving all the stakeholders, and he focused on the residents and the business voters via the workers. I want to put to him a point that I raised in one of the previous debates on the Bill. What about the City's customers? If we are genuinely talking about a stakeholder democracy, surely the customers must have a say as well?

John McDonnell: Shareholders of individual companies may have some influence over businesses. I cannot find a mechanism for customers that could be built into this structure, although I deal with the issue of contractors in later amendments.
	It is unfortunate that new clause 1 would create a split between the public sector and the private sector, which does not reflect the real work involved in the delivery of public services and services generally in the City of London corporation.
	Because a sliding scale of reforms is involved, I suggest that the proposals be voted on separately.

Alan Simpson: I am sorry to be pedantic. My hon. Friend listed 100 major City institutions and the number of employees—[Hon. Members: "He did not."] Well, he mentioned them, and made copies of the details available to Members.
	How do we know that the number of people registered as employees is the genuine number of employed people? What mechanisms will allow us to establish whether these are made-up numbers, genuine numbers or simply bought numbers, in an obscure voting process?

John McDonnell: That is a valid point, with which I will deal in due course.
	In our last debate, the argument advanced against basing voting rights on the number of workers in a company was that, according to the City corporation, there was no operable way in which the number of employees could be established and registered. Now it has come up with one: it took four years, but we are nearly there. All we need do is establish a registration system based on the number of employees and their entitlement to vote, and one of my amendments deals with that.

Andrew Dismore: I will not refer to voters, because the people I refer to are not exactly voters, although they are part of the franchise. Does my hon. Friend think that they should be treated in the same way as the franchise in the rest of the country in terms of age, nationality, citizenship and so on, or does he believe, as the City seems to, that anyone should be able to vote?

John McDonnell: I am trying to arrive at a simple mechanism to allow the voters—the workers in a company, that is—to be properly registered. The Bill as presented by the corporation attempted to reflect the composition of the work force. I have tabled amendments to try to encourage that, and to find a practical way of doing so.

Jeremy Corbyn: I thank my hon. Friend for trying to clarify the point, and I am sorry to have missed his opening remarks.
	Is the proposal based on the ordinary place of work of an individual employed by a company, on that person's permanent place of work, or on the place where the payroll is drawn up? There are people, especially in the public sector, who travel a great deal in the course of their jobs. That probably applies almost as much to those in the private sector. It will be impossible to identify a place of work definitely and to establish that someone is on the payroll unless all names and numbers are made available.

John McDonnell: The City corporation's amendments deal with some of my hon. Friend's points, and my amendments aim to construct a further device to give us some security in that regard.
	Let me deal with promoters amendments Nos. 1 to 4 and 5, to which I have tabled amendments (b) to (d). The promoters amendments place emphasis on the occupying of premises. We are moving away from the link with hereditaments to qualification based on occupancy. It is proposed that the reference to rates should be deleted, but I should have thought that, if the reference to the 1957 Act remains, some definitions in the Bill should be retained. Let us, however, concentrate on the concept of "occupying". Some of the amendments introduce that concept to emphasise physical presence on the premises. Amendment No. 3 substitutes "premises" for "hereditament", and amendment No. 4 refers to "occupying for relevant purposes"—such purposes being defined in lines 15 to 18 on page 2 of the Bill.
	However, the inclusion of "relevant purposes" in this instance is bizarre. It seems to refer to everything from religious worship to prostitution, which could be called a calling or a profession. Which is which?
	Hon. Members should not be deceived by the amendment. It does nothing to insist on personal occupation—on someone being in physical occupation as we would normally understand that term. A company can still qualify by occupation through a director, officer, employee or agent of that body, or through a holder of any paid or unpaid office. The amendment to emphasise occupation by personal or physical presence is undermined by including such a wide range of people. It is a misguided approach.

Andrew Dismore: My hon. Friend has raised an interesting point that begs an important question: who does the appointing on behalf of the companies? Presumably, some of the directors on the executive board may in some circumstances be said to be working in the particular building concerned and may be involved in appointing the electors, but a company is its shareholders. They may theoretically occupy the building through the company but in practice never go within 100 miles of it. Who is actually the occupier for that purpose?

John McDonnell: That argument was raised earlier. We have the concept of occupying premises and employing workers to qualify the body to gain votes, but those votes may be exercised by an individual. That is the block vote. There is no reference to shareholders being involved in that decision-making process.

Jeremy Corbyn: Could the provision apply to people who work for a major company, are based overseas but are on the payroll of the head office? Their votes would be taken into account even though they may not have even been in this country for years.

John McDonnell: The definition of occupancy is so watered down by the amendments that there is potential for absent landlords to exercise votes in that way. I urge the House to reject the amendments because they are worthless.

Andrew Dismore: To extend that point, is this not similar to the Irish peerage of the 19th century? Peers who never went anywhere near Ireland had their seats in the House of Peers as it then was and were part of the legislature. They had no contact whatever with the area that they supposedly represented, except perhaps for screwing the peasants to get money out of them.

John McDonnell: I want to move later to an amendment that addresses that point. The promoters amendment to clause 5(5) weakens the link even further.
	I ask the House to reject amendments Nos. 1 to 5 because they are worthless. The promoters amendment No. 5 introduces the definition of work force. It designates the work force as
	"those persons whose principal or only place of work"—
	my hon. Friend the Member for Islington, North raised this point—on a particular day, "the qualifying date", is ordinarily the premises concerned. On that day each year, the employees of a particular company could ordinarily work at that premises. On every other day of the year, they could be employed elsewhere. They could be working anywhere.

Kelvin Hopkins: In extreme circumstances, could we not find that a company had a very small office with a very small number of people, a large number of workers working remotely at screens, and a large number of representatives overseas and all over the country? On one day, they could all come together in that tiny office to make up the qualifying vote.

John McDonnell: That is one of the abuses that has been used so far in the governance of the City corporation: the registration of people at premises at which they do not work except on a particular day. The Committee tried at length to eradicate some of those abuses. On every other day of the year, these people could be employed elsewhere. The company could bus them in on the one day to boost its voting capacity in the City corporation.

Jeremy Corbyn: Companies would not stoop to that.

John McDonnell: They have stooped to that already.

Jeremy Corbyn: I cannot believe it.

John McDonnell: Look at some of the exposures of previous years.
	The new clause also identifies that the people concerned must be persons who work for that body. The entitlement is based upon the number of employees who work for that body on a particular day. The day before, they could be working for anyone. On the day in question, a company could recruit a massive number of temporary workers to boost its voting entitlement, paying them nothing. They could be part-time workers—

Andrew Dismore: On two-hour contracts.

John McDonnell: Exactly. On that day, the company could boost its voting entitlement only to lay off those people the next day, having gained significant voting capacity within the City corporation.

Andrew Dismore: My hon. Friend is outlining an important flaw in the proposals. As far as the electorate in the real world is concerned, we have moved away from a formal date for compiling the electoral register. We have moved towards the concept of the rolling register, which means that people can register to vote and participate in local and national democracy as and when they change address. Should we not have something equivalent for the City?

John McDonnell: There are fundamental issues at stake here, and there is a large potential for abuse. I understood the City corporation's argument that there might be problems in registering workers at a particular point in time at any particular premises. But what annoys me is that these problems could have been ironed out over the last four years of the debate; we could have set up a system of registration to overcome the problems.

Andrew Dismore: Surely compiling a register on a given day in the City of the number of employees concerned—bearing in mind the huge amount of technology available—cannot be any harder than a trade union compiling a list of its members for when it has to have a ballot for industrial action.

John McDonnell: I do not think that it is, and that is why one of my amendments places trade union registration at the heart of the Bill. It is the simplest way of identifying who is working where and who qualifies.

Kelvin Hopkins: Does my hon. Friend agree that there are at least two possible ways of overcoming this? The first is to have a register that is made up once a year, with a registration officer—from the Electoral Commission, perhaps—who does spot checks from time to time. The second is to have a reasonable occupancy level at a particular office. If an office can accommodate 10 people but 100 are registered there, clearly something is amiss.

John McDonnell: There are common-sense ways of dealing with the abuse and fraud that could result from the system, and the new clause would leave the system open to the most appalling abuse. It is not a fantastical scenario either, because it is based upon existing gerrymandering practices in the City corporation.

Andrew Dismore: Surely a way round that point is to look at the Offices, Shops and Railway Premises Act 1963, which laid down a minimum floor space that an individual office worker should have to occupy. If it turned out that a company tried to register more people than its office space allowed, it should be prosecuted for breaching the legislation.

John McDonnell: I know that a proposal was drafted at one point—one that I was often induced to support by the City corporation—to use rateable value for calculating employers. That could be a fall-back position for a system in which we enforce standards upon employers and identify gerrymandering. The new clause has the potential for gerrymandering, a time-honoured tradition that the City corporation has sought to stamp out.

Andrew MacKinlay: The debate is clearly focusing on how we satisfy the need for probity and a proper ethical process in relation to who should have a franchise. Will my hon. Friend consider tabling further amendments to the Bill, not to make the hefty tome that is the Political Parties, Elections and Referendums Act 2000 apply to the City of London corporation but to enable the Electoral Commission to deal with the matter? There is a rich seam of further thoughts for Parliament to consider in relation to whether aspects of that Act could be incorporated into the Bill. The Act has a great many provisions.

John McDonnell: Exactly. I hope that the Bill's promoters will realise the errors of some of their amendments. If they do, it will give us the opportunity to pull back the Bill and table such amendments. In my own small way, may I refer my hon. Friend to amendments (b) to (d) on page 127 of the amendment paper, in which I try to address some of the abuses that have been mentioned?

Phil Sawford: I have to say to my hon. Friend yet again that there was no discussion in Committee of how to verify these matters, or of how the registers would be drawn up. Nor did the petitioners have the opportunity to discuss the matter. On the question of numbers, and in reflecting on another major financial centre, I looked on in horror as it was explained on television that 50,000 people worked in the twin towers of the World Trade Centre. It was with relief that we realised that the actual number was significantly less, but that illustrates how we can judge such numbers by the size of a building and then discover, through a tragedy, that nothing like that number of people is inside.

Andrew MacKinlay: On a point of order, Mr. Deputy Speaker. I understand that, as Chairman of Ways and Means, you have an ongoing discretion in relation to some of the matters relating to this Bill, and that it is open to you to consider at some stage the prudence of this matter continuing in Parliament. I understand that you have, either directly or indirectly, some leverage and discretion in that matter. Bearing it in mind that the Bill started its life and completed its Committee stage before Parliament considered and enacted the Political Parties, Elections and Referendums Act 2000, would I or any other hon. Member be competent to put a representation to you on this question, and would you consider one? Events have overtaken us in the area of electoral law, and you might consider this a matter that should properly have been taken account of in Committee. I am not asking you to consider my submission tonight; I am just asking whether this is something of which you could legitimately take cognisance.

Mr. Deputy Speaker: I cannot deal with hypothetical situations, but it is always open to hon. Members to make representations either to the Speaker or to the Chairman of Ways and Means, whoever is appropriate, at any time.

John McDonnell: On that point, Mr. Deputy Speaker, you may take it as read that representations will be made on this matter.
	My amendments (b), (c) and (d) try to address the prospect of manipulating the count of employee numbers by insisting that the employees who make up a work force are genuine—that is, that they have worked for the company or qualifying body for a period of not less than 12 months. I accept that that does not completely reflect some of the practices operating in the City of London corporation area, because there is a high turnover in certain sectors. Nevertheless, this is a common criterion used to avoid the manipulation of ballots. It is used in legislation elsewhere, and also in the Labour party for the selection of candidates for local councils and for Parliament. Someone has to have been a member of the party for at least 12 months before the start of the selection process.
	The amendment will give some security to the process. I accept that for it to operate, there would have to be some form of registration of the employment in question. I repeat that the City of London corporation has argued in the past that that would be impossible, cumbersome and administratively costly, and therefore could not be introduced—yet it is inevitable if the system is to be based on the number of people employed by a particular company on a particular day.
	I am dealing now with some of the amendments that I have tabled to the amendments. I have yet to deal with my proposals for reform, so I do not expect a vote to be called.
	The registration system is hardly difficult or impossible to construct. It has to carry only three pieces of information: the name of the employee, where he or she is employed, and the company that he or she works for. However, one further piece of information would be required: how long the person has been employed by that employer. That would not be an impossible task for modern systems.

Jeremy Corbyn: I agree with my hon. Friend, but will he make it clear whether he is talking about the individual's ordinary and permanent place of work, or the place where people are based and from which they could be sent to work elsewhere? In the big consulting companies that we have talked about, such as Andersen and others, people are not in the office very often, because they are always being sent off somewhere else. Would those people have a vote or not?

John McDonnell: I believe that we must insist upon there being deemed to be one sole base from which people work. That is in the spirit both of the legislation and of our amendments. Again, if continuing amendment is needed to ensure that the system works, the legislation could be amended, or we could amend the code of conduct that will be published to ensure that registration takes place properly.
	I offer amendment (c), which says that the people concerned should be members of a trade union, as a way of overcoming the problem of registration. In principle, I believe that all workers should be members of a trade union; I am a member of Unison, and many other Members are members of other unions. The amendment would serve as an incentive for employers to promote trade union membership, and for employees to join a trade union.
	The important thing, however, is that amendment (c) would also offer a readily available method of registering the numbers employed at a particular workplace on a particular day. I accept that trade union membership records are not infallible, but they are a useful form of information about who is employed by a firm, where and for how long. They are now recognised in statute in connection with industrial action and ballots, so there are systems already in place, based on trade union membership, which could assist us in the registration process.
	The TUC and the individual trade unions operating in the City—it is usually the MSF, or Amicus, or whatever it is called now—would be only too pleased to assist in developing a reliable registration scheme for use by the City corporation. That would produce a valuable partnership between unions and employers operating in or based in the City.
	Amendment (d) sets out the need to recognise that not all employees are directly employed. People are often contracted to supply services to particular bodies. The reason for tabling the amendment was that it would insert the words
	"or who are contracted to supply services to that body".
	That would reflect part of the debate that took place in the previous Parliament. My hon. Friend the Member for Bolsover (Mr. Skinner) took part in it, although he is not in his place now; I know that he has been unwell. My hon. Friend the Member for Hendon (Mr. Dismore) also spoke, and chastised me for my failure to pay any regard to workers who were not directly employed by a City-based firm but were contractors. You will recall, Mr. Deputy Speaker, that that was described as the "white van man" argument.
	Let me put the record straight.

Andrew Dismore: The "white van man" argument is part of it, but more important is IR 35 man or woman. I do not wish to pursue the arguments about IR 35 now. However, those contractors, who are self-employed but effectively still work for these companies, are a clear example of people who would not be caught within the present definition put forward by the City but ought to be included in the franchise.

John McDonnell: Under my amendment, they would be included. It would cover the full range of people who are currently employed on a contract basis to supply services. I understand and appreciate the concern that has been expressed. The issue is complex but it could be overcome.

Jeremy Corbyn: What proportion of the working time of people on IR 35 would have to be spent with one company based in the City for them to qualify for a City vote?

John McDonnell: With respect to a code of practice on registration at some future date, we would argue that, as in the other clauses, the principal employment would be the relevant one. We based that on the majority of time employed on a particular contract.
	This is a difficult area, and it is difficult to cater for the full range of activities and employment in the City. The amendment seeks to reflect the modern reality of work and trade in the City area. Many workers are not directly employed; they often work for themselves or are under contract to a company that could be described as a qualifying body. Many may be contractors, but their contract status is often with one or two firms at most. They operate virtually like direct employees, so under the amendment they would be covered by the Bill.
	If there is to be an allocation of votes in the City based on employment, this type of employment and employee should be recognised. Not to do so would be to fail to relate to the modern experience of employment in the City.
	I turn now to my amendment No. 52 and promoters amendments Nos. 6, 7 and 8. I shall discuss the amendments together as they relate specifically to occupancy. I find clause 2(2) virtually incomprehensible. Even taking into account amendment No. 6, I take it to mean that although definitions of occupancy in clause 2(1) have the emphasis correctly on personal and physical presence, those caveats are virtually meaningless for unincorporated bodies. That is why amendment No. 52 seeks to delete subsection (2). Under the subsection, it does not seem to matter whether the owner or the tenant is in occupation. Amendment No. 52 would delete the subsection as it is contrary to everything that has gone before and the emphasis on connection to place or occupancy by physical presence.
	Amendment No. 7 would insert "doing" after "to be" in line 20. It would, if amendment No. 52 is accepted, become superfluous. Amendment No. 8, would also be superfluous if amendment No. 52 is accepted.
	Amendment No. 149, which is the promoters' main amendment, was outlined by the right hon. Member for North-West Hampshire. It would amend section 6 of the City of London (Various Powers) Act 1957 dealing with qualification of voters at ward elections. My understanding is that there are three categories of voters—the owner-tenant, the resident and now the new voters, the qualifying bodies occupying premises. However, under amendment No. 149, the qualifying bodies will gain votes based upon their occupation and employment.

Jeremy Corbyn: What does my hon. Friend mean by an owner-tenant? Is that the owner of the freehold, the owner of the leasehold or the tenant of a sub-lessee or a head-lessee? Who gets a vote?

John McDonnell: In my understanding, ownership or tenancy would qualify.
	Qualifying bodies are the key to amendment No. 149. Does occupation of those qualifying bodies actually mean—

George Young: rose in his place and claimed to move, That the Question be now put.
	Question put, That the Question be now put:—
	The House proceeded to a Division.

Mr. Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 205, Noes 46.

Question accordingly agreed to.
	Question put accordingly, That the clause be read a Second time:—
	The House divided: Ayes 200, Noes 46.

Question accordingly agreed to.
	Clause read a Second time.
	It being after Ten o'clock, the debate stood adjourned.
	Debate to be resumed Thursday 31 January.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

Barcelona Process and Assistance to Palestinian Society

That this House takes note of European Union documents numbers 11381/00, the Commission Communication on "Reinvigorating the Barcelona Process" and 14778/00 relating to the Special Report by the Court of Auditors on the management by the Commission of the programme of assistance to Palestinian Society; and welcomes the Government's approach to EC assistance to Palestinian society and supports the Government's continuing commitment to the Barcelona Process.—[Dan Norris.]
	Question agreed to.

CONVENTION ON THE FUTURE OF EUROPE

Resolved,
	That, in the opinion of this House, Mr. David Heathcoat-Amory and Ms Gisela Stuart should be the national parliamentary representatives from this House to the Convention on the Future of Europe.—[Dan Norris.]

PUBLIC TRANSPORT (PENSIONERS)

Motion made, and Question proposed, That this House do now adjourn.—[Dan Norris.]

Lindsay Hoyle: Thank you, Mr. Deputy Speaker, for allowing this debate to take place.
	I congratulate the Government on many of the measures and the assistance that they have so far provided for pensioners—for example, the minimum income guarantee, the increase in the basic state pension, the £200 winter fuel payments, and the free television licences for all those aged 75 or over. In my view, that last measure should be extended to all pensioners. I shall continue to pursue the matter with support from hon. Members on both sides of the House. It is important that there should be equality between all pensioners.
	I welcome also the free pass that entitles all pensioners to half-price concessionary travel on buses, which was introduced in 2001. However, many pensioners are dependent on public transport and live on extremely limited incomes. Transport costs take a significant part of pensioners' disposable income. The need for free public transport is important, especially if one lives outside town areas and in remote villages, where the costs are even greater. There are areas that have never benefited from municipal transport, and we have always been envious of towns that had that facility. Unfortunately, that benefit did not extend to most parts of Lancashire.
	The need for free concessionary pensioner travel has been recognised in Scotland and Wales and in many metropolitan areas within England. I am sure that my hon. Friend the Minister is well aware that in Wales concessionary fares are within the remit of the Welsh Assembly. We welcome the Assembly's efforts on behalf of pensioners. It was after the 1999 elections that the Assembly decided to adhere to the decision that it would bring free travel into Wales in April this year. It is important that from April this year a pensioner can travel on buses throughout Wales. That is something of which we are envious in England.
	I look to Scotland, where Fife has always allowed free travel for pensioners. Strathclyde has low travel costs. Scotland now has the ability to consider the introduction of free travel for those who are blind, disabled or pensioners. Once again, we must recognise that the poor relations will be English pensioners.
	London is a good example of somewhere which offers something positive to pensioners. The standard concession in London for elderly, blind and disabled people crosses 33 boroughs. The scheme provides for free travel for pass holders on buses, the underground, the docklands light railway and other rail services. Free travel is available on buses from 9 am to 3 am the next day from Monday to Friday, and at any time on Saturday, Sunday and public holidays.
	Free travel on railway services in the London area is available from 9.30 am from Monday to Friday until the last train at any time on Saturday, Sunday and public holidays. Once again, that is a benefit for pensioners within London.
	Greater Manchester adjoins my constituency, which is in Lancashire. There, we look across the border with envy because although Manchester does not offer free travel to pensioners, it offers travel all the way across Greater Manchester at a cost of only 40p.

David Crausby: My hon. Friend will know that I represent a Greater Manchester constituency, albeit on the northern fringe. My constituents have concessionary travel, but effectively in only a southerly direction. If they lived in the centre of Greater Manchester, they would have concessionary travel in all directions. Does my hon. Friend agree that even within Greater Manchester there is still a postcode lottery?

Lindsay Hoyle: I recognise that. My hon. Friend makes a valid point. He represents a constituency that is on the edge of the area. He has Lancashire to one side and Greater Manchester on the other. I understand that there is a lottery in terms of where a person lives in Greater Manchester, and I appreciate the importance to his constituents of ensuring that there is free travel and doing away with the 40p charge. However, I am still envious of what my hon. Friend's constituents enjoy. At the same time, I am aware that if they travel towards the west, the east or the north, they will suffer from the problem of paying much higher fares.

Nicholas Winterton: As the hon. Gentleman knows, I represent a Cheshire constituency to the south of Greater Manchester. My constituents feel aggrieved that they cannot benefit from the 40p charge to which he referred. If there are to be concessionary fares for the retired, they should be universal throughout the United Kingdom and not available, in the main, only to those who live in metropolitan areas. Does the hon. Gentleman, for whom I have great regard, agree with me?

Lindsay Hoyle: The point of this debate is to ask for universal free travel throughout the United Kingdom; that is the starting point, and we have got to ensure that that happens. I shall look at the interest expressed by the hon. Gentleman; his constituency is near to mine and he could probably enjoy the benefit of free travel so, of course, I take his concern to heart.
	I shall talk about Greater Manchester for a little longer. Perhaps the Minister will consider a 40p charge for people in Lancashire as a stepping stone. Free travel is obviously a major step, but a concessionary fare would be welcomed by many pensioners who do not have the benefit of city schemes. Free travel would be welcomed by 15,500 pensioners in my Chorley constituency. Concessionary schemes are excellent, but we must bear in mind the costs borne by pensioners in towns such as Chorley, even with the half-fare pass. Pensioners in Chorley still have to make a difficult choice; they can have a half-fare pass, but it cannot be a combined pass for rail and bus—it is one or the other. That is sad; we should aim for the goal of schemes which cover any form of public transport.
	As my hon. Friend the Member for Bolton, North-East (Mr. Crausby) said, a half-price ticket from Chorley to Bolton—a matter of miles—costs a pensioner £1.90. Pensioners can travel across London for free; they can travel all the way across Greater Manchester for 40p. There is therefore a great difference for pensioners who do not get the benefit of such schemes. There is a strong case, not only for free travel for pensioners, but for stricter regulation of prices charged by private bus and rail operators. A half-price pass can leave pensioners facing high transport costs if prices continue to rise as they have been.
	I have been approached by many pensioners who are concerned about the cost of travelling by bus and train, particularly when they hear that friends and family who live in Greater Manchester receive good treatment compared with the people of Lancashire. Better rail concessions are needed. Once again, there are varying rates for pensioners, depending on where they live. In London, travel is free; in Manchester, it is 40p. We can do much more to end those anomalies for pensioners.
	Given the Government's commitment to an integrated transport system, it would make sense to introduce competitive concessionary rates or, if not, off-peak free travel for pensioners; we should aim to move towards free transport and introduce a combined pass for pensioners so that they can switch between rail and bus. If we are to encourage people to use public transport, we must make it easy for pensioners to use a combined pass that would allow them to travel anywhere on any form of transport; we must achieve that objective. For all those dependent on public transport, travel often involves using more than one form of transport and changing buses, which is costly with a half-price pass.
	I am aware that my proposals would be expensive, with a possible additional cost of £300 million if free transport were introduced. However, as I have said, it could be introduced in stages over a number of years; the money would be well spent and the initiative would be welcomed throughout the United Kingdom. At the end of the day, off-peak free travel would not cost very much. We subsidise many of those routes; off-peak trains and services are empty. Why not make a start and allow free off-peak travel for all pensioners throughout the UK? We should consider the benefit of doing so.
	In conclusion, we can see the benefits of free travel for Londoners; in April, free bus travel across Wales will be introduced. Cities throughout England have various schemes. My hon. Friend the Member for Derby, North (Mr. Laxton), when leader of Derby city council, introduced free bus travel in Derby. However, Derbyshire has only half-fare passes, which is anomalous; there is struggle between the country and the city, which we must resolve. Surely it is time to ensure that villages enjoy the same benefits as cities and towns. They miss out on many opportunities, but we have a chance to take a positive step towards equality.
	I find it interesting that the Government say that they will give the private Member's Bill on age equality a fair wind, but once again we see that there is no equality for pensioners. There ought to be equality for pensioners and we can make a start tonight. I am sure that my hon. Friend the Minister will take on board a lot of what is said and give it a warm welcome. A great deal could be done for very little money and, by working through the Minister's good offices and through the Treasury to consider funding, we could achieve a better quality of life for all pensioners throughout the United Kingdom.
	We must emphasise there should be equality for all pensioners, whether they live in Wales, Scotland or England. As a start, they should have the benefit of free off-peak travel or a limited Greater Manchester-type 40p scheme, but let us ensure that we head towards free concessionary pensioner travel.

Russell Brown: I applaud my hon. Friend's initiative on free travel for pensioners, which my area had for four years in the early 1990s with assistance provided through the local council. Quality of travel is the other issue, however, and my hon. Friend the Member for Carlisle (Mr. Martlew) would tell the House that Stagecoach's cuts in services in our area do nothing to help pensioners and nothing to achieve the free travel that they seek.

Lindsay Hoyle: I agree. Stagecoach operates in our area as well. I say to my hon. Friend that we ought to make a start. If buses and trains are running around empty, the scream goes up that they should be removed because nobody uses the service that they provide, but people would begin to use them if we provided free travel. That should develop increased provision for rural areas, because at least services would be justified. We must justify the subsidies that we offer and introducing free off-peak travel for all pensioners is the way to do it.
	That is a clear means to ensure that remote areas have services and that people will use them. Those involved in local government always argue, "We've done a survey and we have worked out that one person uses this service one day a week." We all recognise that that is not acceptable, so we must persuade people to use services and give them a choice by providing public transport. If pensioners who want to visit the nearest town or to see friends know that they can travel free off-peak, they will use those services, which will justify the subsidy.
	We must ensure that transport becomes more sustainable by carrying more and more people. The Government would welcome such an increase, and that could be achieved by getting away from the old, dangerous British Rail mentality. The usual story was, "We're not making enough profit, so put the prices up. The numbers that we carry don't matter." That myth went out years ago. All it meant was that the number of people using the services declined.
	We want to get away from that attitude, but a half-fare pass would not achieve that. If prices go up every year, the service becomes more costly for pensioners, so free off-peak travel is the best way to ensure equality for pensioners, not just in our region, the north-west, but throughout England and the United Kingdom. That would not cost a great deal, but it would make a start on achieving equality for all pensioners. I believe that all old-age pensioners should have that benefit.
	We ought not to shy away from that important issue. I know that the Minister will listen carefully and I am sure that she will take on board the points that have been raised. Pensioners are struggling, not just in Chorley, Macclesfield, Bolton, Rochdale and Derby, but throughout England. London pensioners would say, "We have a good service, but why don't our cousins in other parts of England have the same benefits?" They recognise that difference. If those pensioners want to travel outside London, why should they not be able to do so for free? The limited scope should be extended, and the benefits given to all.
	I cannot think of any pensioner organisation or any pensioners who would not support this proposal. The clamour of support from my constituency has allowed me to introduce this debate. It is important that the debate has taken place. Hon. Members who have turned out to listen are fully supportive of my proposal. We look to the Government to ensure equality for all pensioners throughout the United Kingdom. We look forward to positive action from the Government, which they have taken on other pensioner issues.

Andrew Rosindell: I congratulate the hon. Member for Chorley (Mr. Hoyle). I regularly agree with him on many issues, and this is yet another. I believe that our pensioners deserve better. One way to enhance the lives of many pensioners is to give them access to travel, and there are many advantages in doing so. It would enable pensioners to travel, go for days out or go shopping, and we would save a lot of money by promoting active lives for pensioners, thus reducing costs for the health service. Furthermore, if pensioners travelled, they would spend money and would thus improve their local economies.
	I feel strongly that the postcode lottery must be dealt with, because it is utterly wrong that people who live on one side of a border get the advantage of a free travel pass, whereas those on the other side do not. I could mention many examples of that. The hon. Member for Chorley referred to Greater London, which has a freedom pass that allows pensioners to travel from one end of London to the other. I represent the Romford constituency, which is on the edge of London going into Essex. The problem is that people who live in Romford can travel free to Brentford in the west of London, but not to Brentwood, which is five miles up the road. They can travel free to Harrow but not to Harlow, to Southgate but not to Southend.
	I should like to see a universal, freedom bus pass for all pensioners. That would have economic and health advantages. Pensioners have fought for this country and paid their taxes, and they deserve better in their later years. I congratulate the hon. Member for Chorley on raising this issue. I assure him of my full support for everything he said, and I look forward to the Minister's response.

Sally Keeble: I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on securing a debate on this important aspect of older people's needs. I am aware of the interest in free travel for pensioners, which is probably why there are other hon. Members present in the Chamber, not just him and me. My hon. Friend and I have corresponded on this subject, as have a number of other hon. Members on both sides of the House. I hope that my remarks will go some way to addressing the points that he has raised.
	My hon. Friend is absolutely right to recognise the progress that the Government have made in improving the lives of pensioners. A number of measures, such as bus passes and the winter fuel allowance, have made some of the biggest differences to older people's lives.
	Concessionary fare schemes offer cheap travel on local transport for people who are economically disadvantaged. They are a clear demonstration of our commitment to fighting social exclusion. We want to ensure that bus travel remains within the means of those on limited incomes. I am very much aware of the fact that for people on lower incomes, especially older people, buses are the most frequently used form of transport. My hon. Friend might also reflect on the fact that other people who are socially excluded have great difficulties travelling, and affordable and accessible bus transport is important for them, too.
	As my hon. Friend said, because of the particular importance of transport to older people, last spring we implemented the provisions in the Transport Act 2000 requiring local authorities to offer a minimum of 50 per cent. reductions to elderly and disabled people using local bus services. People with disabilities, of course, also experience problems when travelling.
	The necessary travel passes must be issued free of charge. Let me say to the hon. Member for Romford (Mr. Rosindell) that although there is only a 50 per cent. reduction in the fare, it is important for people to know that they should not have to pay for their pensioners' travel passes.
	Our changes currently benefit some 5.5 million pensioners and 1.5 million disabled people in England and Wales. This will be the first time many of those people have benefited from any travel concession, and the new arrangements are a real advance on what they had before.
	Provision for travel concessions is contained in three Acts—the Transport Act 1985, the Greater London Authority Act 1999 and the Transport Act 2000. As I have said, local authorities in England and Wales must arrange for older and disabled people in their area to receive at least a half-fare concession. There is nothing to stop authorities providing a more generous scheme. Indeed, as Members have said, some already do, especially in London.
	The 1985 Act gives local authorities discretion to offer more generous concessions on bus and other public transport services—including local trains, metros, light rail and ferries—as well as concessionary travel outside their boundaries, if they so wish. Many authorities already offer local concessions on other modes of public transport. As my hon. Friend says, many also offer transport cheaper than at half price. Obvious examples are London, Merseyside and the west midlands, where free travel is offered not just to pensioners but to people with disabilities.
	Some Members mentioned better schemes in Scotland and Wales. Decisions of that sort must be made by devolved Administrations. One consequence of devolution is that those Administrations will sometimes make decisions that differ from those made by the Government in England.
	As my hon. Friend said, concessionary travel schemes are important because they allow some of the most socially excluded people, especially pensioners, a chance to travel which they might not otherwise be able to afford. The Government, however, cannot ignore the resource implications. There is no doubt that concessionary fares are expensive for them. Of course it is an attractive option to go further with our statutory half-fare minimum requirement, but making the standard even more generous—perhaps by providing completely free travel—would increase the cost of concessionary travel considerably. As my hon. Friend said, it would raise the total cost of bus travel by some £300 million. That would be in addition to the £490 million that local authorities in England are already spending. Whether authorities offer pensioners free travel on public transport is wholly at their discretion.
	My hon. Friend mentioned rural transport, perhaps because of the position of pensioners living in villages. Concessionary fare schemes are not all that we provide to help to subsidise bus services. Only last Friday, the Government announced spending of some £30 million on a series of new rural services under the rural bus challenge scheme. That is extremely important, not because it provides extra concessionary fares but because it provides new and innovative services that meet the needs of some of the most disadvantaged people in rural areas. Some services have been particularly designed to meet the needs of pensioners. The need to be taken to hospital is one of the most obvious. Mobile services are also provided: instead of people being taken to services, the services are taken to people in country areas.
	I therefore urge my hon. Friend and others to look carefully at the thoughtful work that the Government are funding local transport authorities to do to make absolutely sure that lack of transport is not a barrier to pensioners and other people with mobility problems using services, going shopping or going about their day-to-day life.
	It is undoubtedly true that free or low-price rail travel would produce benefits for passengers, but a huge subsidy cost would arise from such a policy, to be met by the Government and consequently by the taxpayer. As all hon. Members well know, our policy is to stimulate investment in improvements in capacity and quality of rail services, through a mixture of public and private investment. There are no current plans to introduce free or low-price travel generally.
	Some train operators promote widespread reduced fares to attract passengers to rail services. For example, the senior railcard is available to people aged 60 and over. That costs £18 a year and offers one third off most rail fares. All train operators are required by the Strategic Rail Authority to participate, and the scheme is run by the Association of Train Operating Companies. The terms of the senior railcard must be no less favourable than under British Rail and may not be amended without the SRA's agreement.
	Further recognising the need for pensioners to be able to make long-distance journeys at lower prices, which is important if they are to enjoy the same rights as other people, we announced in November our agreement to a proposal under which coach operators would provide half-price fares to older and disabled passengers on long-distance scheduled coaches in England. In return for those fare concessions, operators would for the first time receive a fuel duty rebate. That will be an important step in taking travel for pensioners forward.
	As my hon. Friend the Member for Chorley probably knows, our Travel Concessions (Eligibility) Bill will equalise the entitlement to concessionary travel for men and women at the age of 60. Again, that will improve the position of pensioners.
	I am not unsympathetic to the aims of my hon. Friend, but we must look at the financial implications of providing wholly free travel and balance the available funds with the many other competing demands on the public purse—not just services generally but the demands of different people to be able to travel at a reduced price. For example, there is always pressure to include groups such as school children, students and young people. My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) recently introduced a ten-minute Bill to allow local authorities to extend schemes to people aged up to 25.
	I hope that my remarks demonstrate how seriously the Government take the needs of older and disabled people. We have taken and continue to take measures to improve their quality of life and to ensure that transport does not act as a barrier to people enjoying their right to move properly around this country and enjoying a good quality of life.
	Question put and agreed to.
	Adjourned accordingly at seventeen minutes to Eleven o'clock.